Indian Institute of TENN) Institute of Company Banking & Finance Secretaries of India CERTIFIED BANKING COMPLIANCE PROFESSIONAL Mastering Compliance SkillsCertified Banking Compliance Professional Course Background : The course on compliance in banks has been planned based on the suggestions made by the Governing Council members of IIBF The institute had pursued the suggestion by organizing workshops in collaboration with International Compliance Association (ICA), London. As compliance function primarily deals with local laws and regulations, the Institute decided to develop the courseware intemally and seek collaboration for offering a certification course. The Institute of Company Secretaries of India (ICSI), New Delhi has come forward recently for offering a joint certification with IIBF to their members as also the CAIB holders to make available well qualified candidates to work in the compliance department inbanks. Objectives: The course primarily seeks to cover the following viz. importance of compliance function in banks, compliance and organizational benefit, structure and issues in compliance function, various aspects / coverage of compliance in banks, role and functions of compliance. Scope: The certificate course seeks to enable the company secretaries : # To perform the dual role of Company Secretary (Risk Manager) as woll as that of the Compliance officer / Chief Gompliance officer * To ensure observance of applicable statutory provisions contained in various legislations such as Banking Regulation Act, Reserve Bank of India Act, Foreign xchange Management Act, Prevention of Money Laundering Act etc. and also other Continued.Continued regulatory guidelines issued from time to time; standards and codes prescribed by BCSBI, IBA, FEDA\, FIMMDA etc. and bank's internal policies and fair practices code +» Toacquaintthem with the tools of managing risks ‘» Tounderstand compliance function with special reference to areas ofrisks . Tobe ‘conversant about the procedures of compliance functions in a bank so that they _are able to set priorties for the management of the compliance risks in the bank to suit its requirements ‘© To identity the level of compliance risk in each business line, products and processes and formulate proposals for managing such risks Coverage: The course broadly covers Risk Management in banking and financial institutions covering inter-alia Credit Risk Management, Operations Risk Management, Market Risk and organization of risk functions in Banks Legal and Regulatory aspects of Risk, Governance and Compliance Compliance function - Roles and Responsibilities Target group: ‘ ICSimembers, who are desirous of warking in banks Inthe compliance area ¢ Persons working in the compliance department in banks and / or persons identified for working insuch departmentsModalities : A. Eligibility The examination is open to: Members of ICSI and / or CAIIB holders working in banks. B. Fees The examination fee will be Rs.6,742/- inclusive of service tax for two papers and two attempts. For additional two attempts the fee will be R8.3,371/- per attempt. C.Methodology The Gertiticate Course comprises of two stages namely : ¢ MCQ based online Examination intwa papers viz., a) Risk, Regulation & Governance and b) Compliance in banks * Classroom Learning Candidates who pass the online exainination are eligible to attend the classroom learning sessions D. Mode The course will be conducted through distance learning process. !IBF will arrange contact classes subjectto availability of sufficient candidates in select centres across the country. E. Study Material ‘The study materials for the Certificate Course wili be available with Macmillan India Limited and Taxmann India Private Limited outlets F. Examination The online examination for the certificate course would be conducted by IIBF. Examinations will be held twice in a year in June and December on Sundays. Medium of examination will be English. G.Class Room Learning Class room learning would be imparted at IIBF and / or ICSI centres, The duration of the class room learning will be 5 days and the batch size would be a maximum of 40 candidates. The fee for class room learning at IIBF, Leadership centre will be Rs.22,472/- inclusive of service tax (non residential) and fee for class room learning at ICSI will be informedseparately by them to the eligible candidates. H. Certification Passing in the online examination and completion of class room teaming is essential for the award of Certificate.Proposed Procedure 4, Admission for the course would be through online mode. Application Forms are to be downloaded from the IIBF's website i.e. www.libf.org.in. Eligible candidates to join the course by paying the fees which include examination fees for the two attempts. 2. Candidates to study the prescribed courseware procured from the market. 3. Study time : There has to be a minimum gap of 3 months (study time) after registration This means that a candidate cannot appear for the Examination unless 3 months have elapsed from the date he / she has registered for the course. 4, Candidates to appear for the Online Exam - objective type - 120 Questions for 100 marks. There will be two online papers - a) Risk, Regulation & Governance and b) Compliance in banks Passing marks would be minimum 60 marks in each paper. In case a candidate is not able to pass the exam within the 1" block of 2 attempts, he / she can appear for a further period of 1 year (2 block) ie. 2 more attempts on payment of requisite fee. Candidates not able to pass the exam within the stipulated time period of two years (four attempts) are required to register de-novo by submitting fresh online application form. Such candidates will not be granted credit for subject passed earlier, if any. Attempts will be counted from the date of registration irrespective of whether a candidate appears at any examination or otherwise a. There will be no negative marks for the wrong answers. There is no system of grace marks. b. Examination will be in English and will be conducted on two Sundays, twice in a year in June and December. The examination date will be announced by the IIBF at least three months before the examinationClassroom Learning- Enrolment Procedure : 1. After passing the online examination, candidate has to log on to IIBF website- and select his / her convenient slots for class room learning (5 days) from the pre-determined dates and venue (IIBF or ICSI) put-up on the website by paying the fees for class room learning to the respective organisation where he seeks to undergo classroom learning. » Candidates to attend class room learning in IIBF or ICSI, as per the slot selected (ie. at IBF or ICSlasthe case may be). 2 Total Marks for class room learning will be 50 and passing marks is 25. Marks for classroom learning will be awarded by faculty based on class room participation, analytical skis, discussion ability on compliance case studies etc. 2 Candidates, who successfully complete the class room learning, will be eligible for the Course Completion Certificate. 2 The names of the certified candidates will be hosted on tIBF Portal and also forwarded to all Commercial Banks for considering them for selection / appointment as Compliance Officers. This will not be regarded as a placement exercise and there ‘will be no guarantee for placements, Award of Certificate : All the successful candidates will be awarded ‘Banking Compliance Professional citation jointly by IBF and ICSI, as mutually agreed.Course syllabus Paper-I: Risk, Regulation & Governance ‘Module -A: An overview a) Riskdefinition {policies ~ Risk Process-Risk Organization - Key risks-Gredit risk, market risk, ‘operational risk, liquidity risk, legal risk, interest rate risk and currency risk 'b) AssetLiability Management + ALMConcept + AlMorganization + ALCOtechniques tools + Simulation, Gap, Duration analysis, Linear and other statistical methods of contro! ¢) Riskmeasurement& Control + Calculation = Risk exposure analysis = Riskmanagement/ mitigation policy + Risk immunization policy / strategy for fixing exposure limits = Riskmanagement policy and procedure + Riskadjusted retum on capital - Capitaladequacy norms @) Riskmanagement = Capital adequacy norms + Prudential norms - Exposurenorms - Conceptof Mid office - Strategies and Arbitrage opportunities - Regulatory prescriptions of risk management Module- 8 : Credit RiskManagement = Introduction - Basel! Three pillars of Baseltl and Capital for Operational isk ~ Frame work forrisk management ‘RBI guidelines on riskmanagement ‘Riskrating andrisk pricing = Methods tor estimating capital requirements - Creditrisk-standardized approach ~ Creditrisk -advanced approach. ~ (Credit rating | credit scoring and rating ‘systemdesign - (CreditBureaus + Internal Capital Adequacy Assessment introduction to structured products Module -G: Operational Risk - 4ntroduction, Basel-1 & 1 - RBI guidelines = Likely forms of operational risk and causes for significantincrease in operational risk - Sound Principles of Operational Risk Management (SPOR) = SPOR - organizational set up and key responsibilities of ORM - SPOR - policy requirements and strategic approach for ORM ~ SPOR identification, measurement, contro! / | mitigation of operational risks + Capital allocation for operational risk, methodology, qualifying criteria for banks for theadoption ofthe methods ~ arwewaon of copa crue x pean! ‘Module -D: Marketrisk + Introduction and definition + Prescriptions of Basel4& ll = Liquidity isk + Interest rate risk + Foreignexchange risk = Pricerisk (Equity) = Commodity risk = Treatment ofmarketriskunder Basel ) Standardized duration mettiod ) Intemnal measurement approach-WaR Basel guidelines ~ Risk Management Policy - ALCO structure and functions.Course syllabus Paper-Il : Compliance in banks Module [-Regulation and Regulatory tramework 1) Noed for regulation in banks; importance of regulation, the role of regulators, the instruments of regulation, regulatory motels, regulatory authorities. ‘Module Il- Compliance programme t 1) Compliance Risk and significance of Compliance Function; Compliance Policy; Compliance principles, process and procedures; Steps taken by Banks for compliance; Scope of compliance function; The Compliance Programme 2) Compliance govemance structure: Organizational structure; Responsibility ofthe Board and Senior Management; Gompliance structure at corporate office; Functional departments; Field level; Internal controls and its importanoe 3) Compliances issues; Compliance Risk; Inherent risk and Control risk; Independent testing and effective audit programme; Reporting Framework and Monitoring @omeliance, Reporting of breaches /non-compliances observed; Role of Audi and Inspection; Essentials Forgood compliance 4) Creating compliance culture across the organization; Governance, risk and compliance - GRC framework; Benefits of Taking an Integrated GRC Approach; Whistleblower mechanism; ‘The Components of a Whistle-Blower Policy ; Reasons for compliance failures ‘Module Ill- Regulatory compliances 1) Disclosures in Financial statements of Banks; Disclosure Requirements; Capital; Repo ‘Transactions, Investment Portfolio; Derivatives; Asset Quality; Asset Re-construction, Business Ratios; Asset Liability Management; Accounting Standart; Disclosures relating to Securitisation 2) Exposurenorms; credit exposure to individuals / groups; exposure to certain industies; exposure to capital markets; exposures to joint ventures abroad 3) Computation of CRR/ SLR 4) Capital adequacy, Basel Il, Basel It 5) KYG/Anti-Money Laundering guidelines‘ ModuteWW-Statutory, Regulatory Restrictions and Guidelines on Loans and Advances 1) Statutory, Regulatonyrestrictions on certain sectors 2) Priority sectorsiand MSME 8) Interestratesonadvances 4) NPA regulations ‘Module V- Foreign currency operations under FEMA and other regulations 1) Investmentin Indiaand abroad 2) Guidelines for exports 3) Guidelines for External commercial borrowings (ECB) 4) Money changing, Miscellaneous Remittances from India - Facilities for Residents; Remittance Facilities for Non-Resident Indians / Persons of indian Origin / Foreign Nationals; Risk Management and Inter-bank Dealings 5) Guidelines forimportof goods and services 6) Deposit accounts for NRIs; Memorandum of Instructions for opening and maintenance of Rupee / Foreign Currency / Vostro Accounts of Non-resident & Exchange Houses Module VI-Guidetines for customer service 1) Customer Service Committee of the Board; Role of the Customer Service Committee; Board approved policies on Customer Service, government business, Frauds 2) Finrancial distribution : Insurance, Mutual funds 8) Alternate delivery channels : credit/ debit cards; smart.cards; NEFT; RTGS 7Indian Institute of Banking & Finance (formerly Indian Institute of Bankers) is @ professional education and training institution of banks and financial institutions in india. Established in 1928, institute has been functioning with @ mission “to develop professionally qualtied and competent bankers and finance professionals primarily through a process of education, training, examination, consultancy / counselling and continuing professional development programmes". The Institute is managed by a Goverring Council consisting of Chairmen of various banks and eminent academicians. The Institute is supposed by almost all the banking institutions, financial institutions and RBI. The Institute is primarily known for its flagship qualifications viz. JANIB & CANB. Almostall the bankers acquire the same for their professional development and Career progression. Apart from this, the institute also offers Diploma and Gertficate courses inniche areas, Currently, the Institute has §,01,098 individual members and 701 institutional members. During 2012-13, about 2,98,000 candidates appeared for the JAN, CAlIG, DB&F and other Diploma andi Certificate examinations of the Institute, The pedagogy of Distance learning offered by the Institute comprises (i) publishing specific ‘courseware for each paper / examination; (i) publishing work books (i) holding tutorials through accredited institutions: (v) organizing contact classes; (v) conducting webex classes: (vi) offering e-leaming through portal: (vi) organizing campus training for selected courses et. The state of the art Leadership Centre located in the Corporate Otfice complex of lIBF, Kurla isthe beginning cof anew chapterinthe history ofthe institute to meet the raining and leaning requirements of the manpower In the face of growing challenges, competition, innovations, technology developments and above all customer expectations, The Centre has well designed classrooms, breakaway rooms, seminar hall and a tich library. The ambience fs conducive for learning such that it will enable the participants absorb very efectively he training inputs delivered at the centr. ‘The {nsttuta of Company Secretaries of India (ICSI) is a premier national professional body established by an Act of Parliament (Company Secretaries Act, 1980) to develop and regulate the profession of Company Secretaries, (CSI functions uncier the administrative jurisdiction of Ministry at Corporate Alfairs, Governmentat india. Vision : “To be a Global leader in promoting Good Corporate Governance’; Mission : “To Davelop High Calibre Professionals Facitating Good Corporate Governance” The Institute's Headquarters is at ICS! House, 22 institutional Area, Lodi Road, New Delhi. The Regional Offices are at Mumbai, Kolkata, New Deihi, Chennai. Gentre for Gorporate Govemanoe, Research and Training (GCGRT) is at Navi Mumbai and 69 Cnapiers of ICSI are located in various clies llacross India with ‘one Overseas Chapter ai Dubai. t provides postal and oral coaching and training to students to qualify as Company Secretaries. The ICSI has on its rolls over 31,000 qualified members both in Employment & in Practice, Over 3.6 akh students are currently enrolled in the Company Secretaries Oourse.. ICSI is the largest CS Professional organization which is globally recognised for guiding Industry and academia on highest standards of Corporate Governance. The ICSI 's actively engaged in debate on acceptance and atoption of good governance practices and has pioneered the promotion and propagation of such practices amongst the corporates.STUDY MATERIAL/ COURSEWARE Name of the Book Price RISK MANAGEMENT - M/s. Macmillan Publishers India Ltd. 450/- (For the subject Risk, Regulation & Governance) COMPLIANCE IN BANKS - Mis. 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