9 ways to use credit card properly!

The Reserve Bank of India (RBI) has directed banks to implement a ‘mandatory leave’ policy which will send their employees working in sensitive positions on a surprise leave every year for a minimum of 10 days. This move comes in the wake of a revision of RBI’s risk management guidelines.

“As a prudent operational risk management measure, the banks shall put in place a ‘mandatory leave’ policy wherein the employees posted in sensitive positions or areas of operation shall be compulsorily sent on leave for a few days (not less than 10 working days) in a single spell every year, without giving any prior intimation to these employees, thereby maintaining an element of surprise,” RBI said in a statement.

Move to curb frauds and scams

Previously, it was mandatory for people employed in sensitive positions to go on such leaves. In spite of this directive of mandatory leave being in place, it was found out that employees who were involved in frauds and scams succeeded in hiding evidence before going on leave. Regulations pertaining to mandatory leaves have been in effect since April 2015, but anomalies were recorded in the Nirav Modi fraud case of 2018. After the fraud was exposed, it came to light that the bank employee involved in the crime was successfully making fraudulent entries in the SWIFT system for years at a stretch before getting caught.

The RBI has directed banks to ensure that employees, while on ‘mandatory leave’, have no access to any physical or virtual resources related to their work responsibilities. The only access to internal or corporate email which is used for general purposes shall be granted to the employees.

The RBI has also directed the banks to prepare a list of sensitive positions that will come under the ambit of this policy. “Banks shall, as per a Board-approved policy, prepare a list of sensitive positions to be covered under ‘mandatory leave’ requirements and the list shall be reviewed periodically. Implementation of this policy shall be reviewed under the supervisory process,” said RBI.

 The revised instructions shall be applicable to all the banks and they shall comply with these instructions within six months from the date of issue of this circular, RBI said.

 With the intention of curbing frauds and scams, the RBI on a periodical basis updates its risk management guidelines. Some other measures include the ‘maker checker approach, which deploys two people to authorise a transaction and staff rotation.