Regulatory Alerts2019-06-26
Board Engagement Policy for Supervised Financial Institutions
The Central Bank's Bank Supervision Department has issued a risk-based framework mandating structured documentary exchanges and face-to-face meetings between regulators and the Boards of Supervised Financial Institutions. The policy standardizes supervisory language, introduces new initiatives for sharing AML/CFT and financial soundness assessments with auditors and correspondent banks, and specifies tailored engagement protocols for domestic systemically important banks, international firms, trust companies, credit unions, and money transmission businesses. For watch-listed institutions, the framework escalates supervisory engagement through a five-stage intervention ladder that requires commitment letters, recovery plans, and potential director substitutions based on financial viability and regulatory compliance.