Mandatory Leave for Employees Posted in Sensitive Positions or Areas of Operation in Bank: RBI

RBI/2014–15/563 DBR.No.BP.BC.88/21.04.048/2014–15

April 23, 2015

Please refer to our cir­cu­lar DBS.CO.FrMC.BC.No.10/23.04.001/2010–11 dat­ed May 31, 2011 on ‘Find­ings of Foren­sic Scruti­ny- Guide­lines for pre­ven­tion of frauds’, in terms of which banks were advised to imme­di­ate­ly put in place ‘staff rota­tion’ pol­i­cy and pol­i­cy for ‘manda­to­ry leave’ for staff. How­ev­er, it has been observed that the pol­i­cy of ‘manda­to­ry leave’ is not being imple­ment­ed effec­tive­ly, lead­ing to an increase in oper­a­tional risk across the banks.

2. Banks are here­by advised that, as a pru­dent oper­a­tional risk man­age­ment mea­sure, it is imper­a­tive that employ­ees post­ed in sen­si­tive posi­tions or areas of oper­a­tions (viz., trea­sury, cur­ren­cy chests, risk mod­el­ling, mod­el val­i­da­tion, etc.) are cov­ered under a ‘Manda­to­ry Leave’ pol­i­cy where­in such employ­ees are required to com­pul­so­ri­ly avail of leave for a few days (say 10 work­ing days) in a sin­gle spell every year, dur­ing their post­ing in such areas. The bank should also iden­ti­fy such high­ly sen­si­tive posi­tions where the bank will, with­out any pri­or inti­ma­tion, advise the employ­ee to be away from his desk for a spec­i­fied num­ber of work­ing days each year.

3. While the employ­ee is on ’manda­to­ry leave’ or asked to be away from his desk as above, it should be ensured that he does not have access to any phys­i­cal or vir­tu­al resources relat­ed to his work respon­si­bil­i­ties, with the pos­si­ble excep­tion of cor­po­rate email.

4. Banks should imme­di­ate­ly put the above arrange­ments in place, if not already done, and imple­ment the same with­out fail. An exhaus­tive list of sen­si­tive posi­tions or areas of oper­a­tions to be cov­ered under ‘manda­to­ry leave’ and under ‘away from desk’ require­ment, may be decid­ed as per the bank’s own pol­i­cy duly approved by the Board of Direc­tors or com­mit­tee of the Board, and the incum­bents of these posi­tions should be kept aware of the above require­ments. Imple­men­ta­tion of such pol­i­cy would be cov­ered under the Pil­lar 2 review of banks’ risk man­age­ment sys­tem by the Reserve Bank of India.

Yours faith­ful­ly,

(Sudar­shan Sen)
Chief Gen­er­al Manager-in-Charge