The RBI has released guidelines for the appointment of the CRO, CCO, HIA in Banks. The guidelines are as follows:
| Abbreviation | Full Form | Main Responsibility |
|---|---|---|
| CRO | Chief Risk Officer | Manages all types of risks faced by the bank. |
| CCO | Chief Compliance Officer | Ensures the bank follows RBI regulations, laws, and internal policies. |
| HIA | Head of Internal Audit | Oversees internal audits and checks whether the bank’s operations and controls are functioning properly. |
The terms of appointment of the CRO / CCO / HIA would be as follows:
(1) Appointing Authority and Rank: A bank shall appoint / designate suitably senior employees, not more than two levels below the MD&CEO, as CRO, CCO and HIA with the approval of the Board.
(2) Knowledge / Experience: CRO, CCO, and HIA shall possess adequate domain knowledge and relevant experience in the respective fields, commensurate with the size, complexity, and risk profile of the bank.
(3) Age: The age limits for CRO, CCO and HIA to hold office may be prescribed by a bank as part of its internal policy.
(4) Tenure: CRO, CCO and HIA shall ordinarily be appointed for a fixed tenure of not less than three years.
(5) Premature transfer / removal: Any transfer or removal of CRO, CCO and HIA prior to the completion of the stipulated tenure shall be subject to the approval of the Board.
(6) External Hiring: If considered necessary, suitably experienced and competent external candidates may be hired as CRO, CCO or HIA. However, consultants, advisors, part time auditors or individuals who are neither on the rolls of the bank/group entity nor have any contractual employer-employee relationship with the bank/group entity shall not be appointed/designated as CRO, CCO or HIA or Group CRO/CCO.
Approval of / Intimation to the Reserve Bank
(1) CRO: Any appointment (including interim appointment and re-appointment), premature transfer, removal or exit of the CRO, along with the reasons thereof, shall be reported to the Department of Supervision, Reserve Bank of India, within five working days. Intimation of appointment (including interim appointment and re-appointment) shall be accompanied with the CRO’s profile.
(2) CCO and HIA:
(i) In case of any appointment, re-appointment, interim appointment, premature exit, or change in tenure of the CCO or HIA, prior intimation of at least five working days shall be provided to the Department of Supervision.
(ii) In the case of banks classified as Domestic Systemically Important Banks (DSIBs), prior approval from the Department of Supervision, Reserve Bank shall be obtained for the appointment of the CCO, by submitting the request, duly recommended by the Board / ACB, at least five working days prior to such appointment.
(iii) Such intimation / request for approval shall be accompanied by the candidate’s profile and a confirmation from the competent authority stating that the candidate is fit-and-proper.
(iv) The appointment may be communicated to the candidate by the bank only after the lapse of five working days from the date of receipt of intimation / request for approval, by the Department of Supervision, provided no communication to the contrary is received from the Department of Supervision.
