Abhinav Sharma, CAMS, CAMI

Understanding Compliance in Financial Institutions: A Detailed Overview An excellent article from Heamanth K **Compliance Defined:** Compliance in financial institutions refers to the adherence to laws, regulations, guidelines, and specifications relevant to the business processes. By ensuring compliance, financial institutions maintain their integrity, avoid legal penalties, and foster trust among customers and stakeholders. Free compliance webinar registeration link https://lnkd.in/gPCfSHBb **Types of Compliance in Financial Institutions:** 1. **Regulatory Compliance:** - **Description:** Adherence to laws and regulations set by governmental bodies and regulatory authorities. - **Examples:** Basel III (banking regulation), Dodd-Frank Act (U.S. financial reform), MiFID II (EU markets in financial instruments directive). 2. **Internal Compliance:** - **Description:** Adherence to internal policies and procedures set by the financial institution itself. - **Examples:** Code of conduct, internal audits, internal risk management policies. 3. **Financial Reporting Compliance:** - **Description:** Ensuring accurate and truthful financial reporting in line with relevant standards. - **Examples:** International Financial Reporting Standards (IFRS), Generally Accepted Accounting Principles (GAAP). 4. **Operational Compliance:** - **Description:** Compliance with operational standards and best practices to ensure smooth and secure operations. - **Examples:** IT security protocols, data protection standards like GDPR. 5. **Ethical Compliance:** - **Description:** Adhering to ethical standards and practices in all business dealings. - **Examples:** Anti-bribery and corruption policies, fair trading practices. **Compliance vs. AML (Anti-Money Laundering):** While compliance encompasses a broad range of regulatory, internal, financial, operational, and ethical adherence, AML is a specialized subset focusing specifically on preventing and detecting money laundering activities. **Anti-Money Laundering (AML):** - **Description:** AML refers to the processes, laws, and regulations aimed at stopping criminals from disguising illegally obtained funds as legitimate income. - **Key Components:** - **Customer Due Diligence (CDD):** Verifying the identity of clients to assess the risk they may pose. - **Transaction Monitoring:** Continuously monitoring financial transactions to identify and report unusual patterns. **Key Differences:** - **Scope:** Compliance is broader and includes AML as one of its components. AML focuses exclusively on preventing money laundering and terrorist financing. - **Focus:** Compliance deals with a wide array of regulations affecting various aspects of the institution's operations. AML specifically targets illegal financial activities and methods to counteract them.

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On Friday, the FATF reported that India has reached a "high level of technical compliance" with its AML and CFT standards. Only five G20 nations, including India, have achieved this status following their mutual evaluations. Discover the steps India has taken since 2010 to enhance its AML/CFT standards and achieve this outstanding outcome in our full article https://lnkd.in/gbGgTScG #FATF #MutualEvaluationReport #India #AML #Compliance

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RBI Governor Shaktikanta Das warns #banks 🏦 against #muleaccounts, with #HDFC leading by example in fraud prevention through strong anti-fraud frameworks. It’s a call to action for financial institutions to adopt proactive measures. With Data Sutram’s #DSAuthenticate, banks can reinforce their defence by verifying and monitoring individuals basis their #DSTrustScore, in real-time, ensuring safeguarding against digital fraud. Don’t just follow, lead in the fight against financial crimes with the right tools and strategies! Join the #FightAgainstFrauds with #DataSutram https://lnkd.in/dTzUbnjx

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The Reserve Bank of India (RBI) has recently introduced stringent KYC norms for cash payouts and pay-ins to bolster security and compliance within the financial ecosystem. These new regulations have far-reaching implications for banks, financial institutions, and customers. In this interview, Vishal Jain, CEO of Manipal Business Solutions (MBS), delves into the intricacies of the new KYC requirements, their impact on the industry, and how MBS's CKYC solution can help banks navigate these challenges. #media #interview #rbi #banks #fintechs #regulations #reducefraud #fraudprevention #AI #compliance #KYC #CKYC #mbs #mediacoverage https://lnkd.in/gn4Cwu2c

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#India has made significant strides in combating money laundering and terrorist financing, achieving high technical compliance with the 40 Financial Action Task Force (FATF) Recommendations. However, challenges remain in addressing specific crime types and clearing case backlogs. As global financial landscapes evolve, staying ahead of AML/CFT risks is crucial. Want to enhance your company's AML/CFT framework? Get in touch with the AMLA® team to discover tailored solutions that can help your organisation navigate the complex world of financial crime compliance and risk management. https://buff.ly/3Y03Kpi #AMLsolutions #IndiaAML #FATFcompliance #FinancialIntelligenceIndia #CombatMoneyLaundering #TerroristFinancingIndia #AMLchallenges #FATFrecommendations #AMLprogressIndia #FinancialComplianceIndia

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FY24 saw bank frauds rise by 166% to over 36,000 cases! It’s safe to say that fraud-risk mitigation is the need of the hour. And this week, we saw RBI take some concrete steps to combat it in the form of master directions on fraud risk. In the latest edition of The Pattern, Mayank J. takes a close look at these directives to decipher why they’re bound to foster an environment of vigilance among REs.  Read on: https://lnkd.in/gevhnJ57

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Introducing the tenth and final book from our Long List: The Great Bank Robbery: NPAs, Scams and the Future of Regulation by Pattabhi Ram and Sabyasachee Dash The Great Bank Robbery explores 11 major financial crimes in post-Independence India, from Mundra to ILFS, through a fictional lens. It uncovers how public money vanishes from banks, highlighting policy failures and the rise of NPAs. Blending humor and clarity, the book calls for a stronger banking system while providing insights into India's banking history and future. Rupa Publications India #GajaCapitalBookPrize #GajaCapital #BookPrize #Entrepreneurship #Business

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Master Directions On Fraud Risk Management | Regulatory Capsule Powered by: Transact Comply This week we review the Master Directions On Fraud Risk Management released by the Reserve Bank of India. On July 15, 2024, the Reserve Bank of India issued guidelines for banks, Housing Finance Companies, and NBFCs. These include Supreme Court recommendations for hearing borrowers before classifying accounts as fraud. Aimed at enhancing fraud prevention, detection, and reporting, these guidelines apply to NBFCs with assets of INR 5 billion and above. The primary goal is timely reporting of fraud to Law Enforcement Agencies, the RBI, and the National Housing Bank. Read more: https://zurl.co/8q1e Explore the product's full scope: https://zurl.co/E0MW #RBI #FraudRiskManagement #NBFCs #FinancialSecurity #FraudPrevention #Governance #EarlyWarningSystem #FinancialRegulation #RBIRegulations #Finance #NonBankingFinancialCompanies #RiskManagement #FinancialIntegrity

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Boosting MSME Finances through Formal Registration and Digital Payments🌟 The Reserve Bank of India's Deputy Governor, Swaminathan J, recently emphasized the importance of formal registration and digital payments for MSMEs. By embracing formalization and maintaining accurate financial records, MSMEs can significantly enhance their financial health and credibility. This transparency helps lenders assess creditworthiness more effectively, bridging the substantial credit gap estimated at Rs 20-25 trillion. Swaminathan J also highlighted the need for MSMEs to adopt digital payment systems, such as UPI and online banking. This not only creates a transparent financial footprint but also improves cash flow management, offering greater control over finances. By leveraging platforms like the Trade Receivables Discounting System (TReDS), MSMEs can unlock liquidity and build trust with financial institutions. The Deputy Governor urged MSMEs to prioritize credit discipline by selecting appropriate credit products and avoiding over-leveraging. Investing in capacity building through skill development and fintech adoption can further enhance operational efficiency and financial stability. These proactive steps are crucial for MSMEs to secure timely and adequate credit, fostering growth and innovation. Despite the challenges, the future looks promising for MSMEs in India. With the government's support and the RBI's initiatives, MSMEs can overcome financial barriers and contribute significantly to the economy. Let's continue to support and empower these vital enterprises for a stronger, more inclusive economic future. Reference Link - https://lnkd.in/gNrVnbvN

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Over 10 cr digital loans disbursed in FY24, volume up by 35%: Report A recent report by Fintech Association for Consumer Empowerment (FACE) highlighted that over 10 crore loans has been disbursed in the previous financial year, with a jump of 35 per cent in volume and 49 per cent in value, in FY24. Story by Anushka Sengupta #DigitalLoans #FY24 #FACE #GrowthRate #NBFC #AUM https://lnkd.in/etRHNVy4

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Fraud functionalities should be an extension of the AML functionalities in the risk management framework, simply because fraud precedes money laundering. But there has not been a strong regulatory push for fraud management as has been for anti-money laundering. Andras Cser, Vice President, Principal Analyst, Forrester; Azentio Software’s Krish Narayanaswami, Managing Director, BFSI; and L Guru Raghavendran, Senior VP, Banking & Capital Markets, weigh in on the state of fraud management in the industry and how technology addresses fraud and AML. Listen to them as they deliberate to find practical business and technology solutions to challenges and risks in today’s digital lending practice that is witnessing an unprecedented pace of change. Watch the on-demand webinar “Lending: Striking a balance between Risk, Digital & Analytics”. https://lnkd.in/dJ-8BBXv #Azentio #AzentioONEBanking #Banking #Webinar #FreeWebinar #Lending #DigitalLending #RiskAndCompliance #BankingSoftware #DigitalTransformation #BusinessIntelligence #Cybersecurity #FinancialCrime #AML #AntiMoneyLaundering #Analytics #ForresterResearch #Forrester Sanjay Singh L Guru Raghavendran Karthik VPB Gaurav Kedia Rahul Arora Swapnil Shetty Khaled Berjawi Darwish Khalil Grace Saade Fadi Gedeon Sandeep Seal

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The Reserve Bank of India (RBI) has released draft rules aimed at enhancing due diligence for Aadhar-enabled Payment System (AePS) touchpoint operators to mitigate fraud. The proposals focus on improving the onboarding process and ongoing monitoring of these operators. Acquiring banks are required to verify all onboarded AePS touchpoint operators and update Know Your Customer (KYC) information if there are no financial transactions for six months. The National Payments Corporation of India (NPCI) and acquiring banks must ensure that each AePS operator is registered with only one bank. Additionally, transaction limits are to be established based on the operators' risk profiles and operational locations. The public has until August 31 to provide feedback, and banks and NPCI will have three months to comply after the rules are finalized. The guidelines have been positively received by industry players, emphasizing stricter onboarding processes and re-KYC requirements. The RBI also introduced a draft for alternative authentication mechanisms in digital payments. #AsiaRisk #Regulation #India Follow us for daily updates on risk and operations in Asia! https://lnkd.in/gG8gkEPs

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The Reserve Bank of India (RBI) has instructed banks to connect their internal compliance systems with its supervisory platform, Daksh. While some foreign banks in India oppose this integration due to the need for substantial adjustments to their advanced systems, public sector banks are progressing with the necessary changes. The RBI has extended the deadline for compliance enhancement to April 2025, responding to requests from lenders. Daksh, launched last year, is a web-based application designed to enhance the RBI's oversight of compliance requirements, fostering a stronger compliance culture among banks and non-banking finance companies (NBFCs). The integration will utilize straight-through processing (STP), following a prior notification in January aimed at elevating compliance monitoring through technological advancements. In a recent internal meeting, some foreign banks raised concerns about the integration proposal and intend to consult with stakeholders, including technology vendors, for clarity from the RBI. The January circular underscored the need for comprehensive solutions to improve compliance monitoring, reflecting the diverse automation levels among supervised entities. This initiative aims to facilitate real-time data access for better communication and collaboration. #AsiaRisk #Regulation #India Get a full accounting of the security situation in Asia by subscribing to Security Asia. Subscribe now--free of charge--at Substack https://lnkd.in/gPtAUrsX https://lnkd.in/gE5Kb7AD

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