RBI guidelines for drafting Best Practices Code for banks
By The Reserve Bank of Indi | 23 Mar 2004
The
BPC modelled by select banks lacked uniformity in their
content and coverage and was not prepared as envisaged
by the Mitra Committee (on legal aspects of bank frauds),
prompting RBI to issue these norms, RBI said yesterday
in a notification to banks.
As per the norms, the BPC should be a comprehensive and
homogeneous document and take into account the instructions
relating to the common fraud prone areas and their prevention
issued to banks by RBI from time to time, the notification
said.
The Code should also highlight the recommendations of the Ghosh Panel and the Mitra Committee. It should take into account relevant recommendations of Narang Committees study of large value frauds, Narasimham Panel on banking sector reforms and recommendations of the estimate committee on prevention of frauds in banks.
The Code should cover all the functional areas like cash, safe custody of other valuables, deposit accounts, investment portfolio, credit portfolio, foreign exchange transactions and treasury operations. The BPC may also incorporate practices that would help prevention of losses to its customers and include suitable guidance to such customers.
The
BPC should be periodically revised and updated in the
light of the experience gained, fresh instructions from
the RBI and suggestions made by internal/external auditors.
The BPC should take into account the instructions of the
Central Vigilance Commission, if any, issued from time
to time.