rkmoon
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The BPC relates to detailed procedural rules for entering into transactional relations within the banks. The main objective is that such procedures, especially those in all fraud-prone areas, should be well documented, compared with national and international best practices, experimented with, and improved upon in the light of the experience gained.
What is essential for BPC ? : Preparation of BPC involves examination of all procedures, processes, products, activities and systems, existing and future (as and when a new product/process is introduced). It needs to be integrated with the overall risk management strategy of the bank and should be considered as a part of the strategy to mitigate all possible operational risk losses.
RBI guidelines on compiling the BPC: Based on the recommendations of Mitra Committee, RBI issued the following guidelines (Mar 15, 2004) for keeping in view while preparing the BPC, so as to bring a certain minimum level of uniformity in content and coverage of BPC.
Comprehensiveness : The BPC should be a comprehensive and homogenous document. The consolidation and incorporation of circulars issued by the banks by itself, does not constitute ‘BPC’. RBI’s earlier instructions issued to banks relating to the common fraud prone areas and their prevention, to be observed.
Recommendations of various committees : BPC should cover / highlight the recommendations of the Ghosh Committee, Mitra Committee, relevant recommendations of the Narang Committee (large value frauds), Narasimham Committee on Banking Reforms, recommendations of the Estimate Committee on Prevention of Frauds in public sector banks, etc. advised to banks for implementation. The BPC should also take into account the instructions of the CVC, if any, issued from time to time.
Minimum coverage : The ‘BPC’ should, at a minimum, cover all the functional areas like cash, safe custody of other valuables (DD/TT/LC/Guarantee forms, etc.), deposit accounts, investment portfolio, credit portfolio, foreign exchange transactions, treasury operations, bills portfolio, remittances, cash receipts and payments, issue/payment of demand drafts, clearing transactions, government transactions, LCs/ Guarantees, etc.
Prevention of loss to customers : BPC may incorporate practices that would help prevention of losses to its customers and include suitable guidance to such customers. Banks should, codify the precautions to be taken by customers and the same should be publicised by placing on their website or through any other medium.
Revision : The BPC should be periodically revised and updated in the light of the experience gained, fresh instructions from the Reserve Bank and suggestions made by internal/external auditors:SugarwareZ-191: :SugarwareZ-191: :SugarwareZ-191:
What is essential for BPC ? : Preparation of BPC involves examination of all procedures, processes, products, activities and systems, existing and future (as and when a new product/process is introduced). It needs to be integrated with the overall risk management strategy of the bank and should be considered as a part of the strategy to mitigate all possible operational risk losses.
RBI guidelines on compiling the BPC: Based on the recommendations of Mitra Committee, RBI issued the following guidelines (Mar 15, 2004) for keeping in view while preparing the BPC, so as to bring a certain minimum level of uniformity in content and coverage of BPC.
Comprehensiveness : The BPC should be a comprehensive and homogenous document. The consolidation and incorporation of circulars issued by the banks by itself, does not constitute ‘BPC’. RBI’s earlier instructions issued to banks relating to the common fraud prone areas and their prevention, to be observed.
Recommendations of various committees : BPC should cover / highlight the recommendations of the Ghosh Committee, Mitra Committee, relevant recommendations of the Narang Committee (large value frauds), Narasimham Committee on Banking Reforms, recommendations of the Estimate Committee on Prevention of Frauds in public sector banks, etc. advised to banks for implementation. The BPC should also take into account the instructions of the CVC, if any, issued from time to time.
Minimum coverage : The ‘BPC’ should, at a minimum, cover all the functional areas like cash, safe custody of other valuables (DD/TT/LC/Guarantee forms, etc.), deposit accounts, investment portfolio, credit portfolio, foreign exchange transactions, treasury operations, bills portfolio, remittances, cash receipts and payments, issue/payment of demand drafts, clearing transactions, government transactions, LCs/ Guarantees, etc.
Prevention of loss to customers : BPC may incorporate practices that would help prevention of losses to its customers and include suitable guidance to such customers. Banks should, codify the precautions to be taken by customers and the same should be publicised by placing on their website or through any other medium.
Revision : The BPC should be periodically revised and updated in the light of the experience gained, fresh instructions from the Reserve Bank and suggestions made by internal/external auditors:SugarwareZ-191: :SugarwareZ-191: :SugarwareZ-191: