According to Basel Committee on Banking Supervision's Customer Due Diligence for Banks, which of the following should provide an evaluation of a bank's policies and procedures independent from its…

Question

Options

• AThe credit risk department
• BThe Board
• CA peer institution
• DThe compliance function

• A
  4% (1)
• B
  13% (3)
• C
  4% (1)
• D
  78% (18)

Explanation

According to the Basel Committee on Banking Supervision's Customer Due Diligence for Banks, the compliance function should provide an evaluation of a bank's policies and procedures independent from its management. The compliance function is responsible for ensuring that the bank adheres to the relevant laws, regulations, and standards on customer due diligence, anti- money laundering, and combating the financing of terrorism. The compliance function should also monitor the implementation and effectiveness of the bank's customer due diligence policies and procedures, identify and report any breaches or deficiencies, and recommend corrective actions or improvements. The compliance function should have sufficient authority, independence, resources, and access to information to perform its duties effectively.

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