How Ricago CMS Empowers Banks/NBFC’s to Adhere to RBI Guidelines

RBI Circular dated 31st January 2024 on “Streamlining of Internal Compliance Monitoring Function — Leveraging Use of Technology” has advised that there is a need to implement comprehensive, integrated, enterprise-wide and workflow-based system solutions / tools to enhance the effectiveness of compliance functions.

The Following has been Stated as per RBI Guidelines:

As per the guidelines issued by the Reserve Bank of India (RBI), Regulated Entities (REs) are expected to implement comprehensive, integrated, enterprise-wide, and workflow-based system solutions/tools to enhance the effectiveness of their compliance functions. These solutions/tools should encompass the following key features:

1. Effective Communication and Collaboration: Facilitate seamless interaction and collaboration among all relevant stakeholders to ensure clarity and alignment on compliance requirements.
2. Comprehensive Compliance Framework: Enable the identification, assessment, monitoring, and management of compliance obligations in a structured and systematic manner.
3. Escalation Mechanisms: Incorporate processes to promptly escalate instances of non-compliance, ensuring timely resolution and mitigation of risks.
4. Approval Documentation: Provide a robust system for recording and tracking approvals from competent authorities in cases of deviations or delays in compliance submission.
5. Unified Dashboard for Senior Management: Offer a consolidated view of the RE’s overall compliance status, enabling senior management to monitor and address compliance matters effectively.

These measures are aimed at strengthening the compliance function, promoting accountability, and ensuring that regulated entities adhere to statutory and regulatory requirements efficiently.

Challenges in Current Compliance Practices

The compliance landscape across banks and financial institutions remains fragmented. While some entities use manual or spreadsheet-based processes, others have started implementing automated solutions. The disparity highlights the need for a standardized framework to ensure consistent compliance practices.

IBA issued a circular regarding Leveraging Technology For Standardised Compliance Framework

IBA is forming an industry forum to develop a standardized framework for regulatory compliance. It was observed that Regulated Entities (REs) employ varying levels of automation in compliance monitoring, ranging from macro-enabled spreadsheets to advanced workflow-based solutions. While some rely heavily on manual processes, others have adopted automated techniques, with many falling at intermediate levels. To address these disparities, the Committee recommended a standardized framework prescribing minimum compliance standards. Banks can use this framework as a baseline to develop or enhance their systems based on their specific requirements.

RBI has launched a Daksh:

The Reserve Bank of India (RBI) has launched DAKSH, a web-based Supervisory Monitoring System to enhance compliance and supervisory efficiency among Supervised Entities (SEs) like banks and NBFCs. The platform automates data collection, inspection planning, cyber incident reporting, and MIS report generation while enabling secure anytime-anywhere access. Reflecting its name, meaning "efficient" and "competent," DAKSH aims to strengthen compliance culture and streamline regulatory oversight.

How can ricago be helpful?

Extensive Compliance Library: Ricago’s Compliance Library consists of multiple compliance requirements/ control points as per RBI regulations. Criticality of compliance items is determined based on Risk assessment considering penalty amount, imprisonment etc.

Senior Management Dashboard: Have a unified dashboard view for Senior Management on the compliance position of the Regulated Entity as a whole. 

Compliance Department Performance Review: Custom module "Compliance Assessments" can be used for performance reviews leveraging workflow and other capabilities.

RBS Tranche: Uploading of RBS Tranche data / information and testing of the Tranche data. Preferably the testing module should have the capacity to upload the testing documentation. RBS Tranche testing is covered under custom module "Compliance Assessments"

Bank's Compliance Risk Assessment: Risk Assessments can be tracked under custom module "Compliance Assessments"

Ricago's Compliance Management System (CMS) offers a comprehensive, workflow-based platform to help banks/ NBFCs to comply with RBI regulatory updates effectively. With features like real-time regulatory tracking, automated compliance monitoring, and a unified dashboard for senior management, Ricago simplifies adherence to RBI guidelines and enhances overall compliance efficiency.

How Ricago CMS Bridges the Gap

Ricago CMS is a cutting-edge solution designed to help banks and financial institutions meet RBI's regulatory standards. Here’s how it addresses key requirements:

• Centralized Compliance Repository: Maintains a library of RBI regulations with real-time updates.
• Workflow Automation: Assigns tasks, tracks progress, and ensures accountability across business units.
• Issue Escalation and Resolution: Automates issue tracking with timely escalations to prevent non-compliance.
• Regulatory Reporting: Simplifies data submission to RBI and monitors timelines to ensure adherence.
• Unified Dashboard: Provides senior management with a holistic view of the institution’s compliance status.