Capacity Building in Banks and AIFIs

The Reserve Bank had constituted a ‘Committee on Capacity Building’ under G Gopalakrishna, for implementing the recommendations of Financial Sector Legislative Reforms Commission (FSLRC).

The recommendations pertaining to banks may be implemented based on their organisational objectives and business strategies, after taking approval from their respective Boards.

Some of the recommendations for implementation are as under:

a.     To begin with, the banks should make acquiring of a certificate course mandatory in the following areas:

•        Treasury operations – Dealers, mid-office operations.

•        Risk management – credit risk, market risk, operational risk, enterprise-wide risk, information security, liquidity risk.

•        Accounting – Preparation of financial results, audit function.

•        Credit management – credit appraisal, rating, monitoring, credit administration.

Banks are free to require certification for other areas of work also. The employees working in the above referred areas should be asked to acquire certifications within 6 months. This period can be extended depending on the time required for the certification. Banks should have a specific policy in place for this purpose.

b.    The employees involved in marketing third party retail products and wealth management products must undergo a certification process. Where other regulators have prescribed any certifications, these too must be complied with.

c.     IBA has been requested to identify in consultation with RBI and provide a list of institutions and courses that will meet the certification requirements by end December 2016.

d.    Banks should identify the courses that are suitable for their operations and put in place a Board approved policy, mandating such certifications. Banks should ensure that by March 2017, the employees have commenced the process of obtaining the necessary certifications.

e.     It is expected that, w.e.f. April 1, 2018, staff will have first obtained the requisite certification before being posted in the above mentioned functional areas.

f.      If an employee has already acquired relevant graduate, diploma and certificate courses offered by reputed universities, the same can also be considered as an accreditation/ certification.

Banks should also prepare a comprehensive policy for their implementation of the

Committee’s recommendations by end-December 2016.

Based on RBI Master circular dated 11/08/2016. For further clarification, please refer www.rbi.org.in ……….. Poppy