capital implications of recognizing certain guarantees. these, too, are available at our web site. this dialogue with bankers has had a substantive impact on the basel ii proposal. i have attached to my statement a comparison of some of the major provisions of basel ii as proposed in each of the three consultative documents published by the basel committee on bank supervision ( appendix 2 ). as you can see, commenters have significantly influenced the shape and detail of the proposal. for example, comments about the earlier proposed crude formulas for addressing operational risk led to a change in the way capital for operational risk may be calculated ; banks'may now use their own methods for assessing this form of risk, as long as these methods are sufficiently comprehensive and the documents used in these presentations are available at the board's http : / / www. federalreserve. gov / banknreg. htm ( " documents relating to us implementation of basel ii " ). web site, systematic and meet a set of principles - based qualifying criteria. that is the ama. the mechanism for establishing capital for credit risk has also evolved significantly since the first consultative paper on the basis of industry comments and suggestions ; as a result, a large number of exposure types are now treated separately. similarly, disclosure rules have been simplified and streamlined in response to industry concerns. at this stage of the proposal, comments that are based on evidence and analysis are most likely to be effective. perhaps an example of the importance of supporting evidence in causing a change in positions might be useful. as some members of this committee may know, the federal reserve had concluded earlier, on the basis of both supervisory judgment and the available evidence, that the risk associated with commercial real estate loans on certain existing or completed property required a capital charge higher than the capital charge on other commercial real estate and on commercial and industrial loans. in recent weeks, however, our analysis of additional data suggested that the evidence was contradictory. with such inconsistent empirical evidence, we concluded that, despite our supervisory judgment on the potential risk of these exposures, we could not support requiring a higher minimum capital charge on commercial real estate loans on any existing or completed property, and we will not do so. in the same vein, we also remain open minded about proposals that simplify the proposal but attain its objective. both the modifications of the proposals in cp3 and the changes in u. s. supervisory views, as evidenced by the commercial real estate proposal, testify to the willingness of the agencies, even at

regulatory and supervisory expectations on compliance function in banks ( shri m. k. jain, deputy governor, reserve bank of india - tuesday, august 20, 2019 - at financial institution benchmarking and calibration ( fibac ) 2019 – the annual global banking conference organised by iba and ficci, mumbai ) shri sunil mehta, chairman – iba, chairmen and chief executive officers of banks, other dignitaries and participants, good evening to all. this conference brings in the best minds from the indian banking fraternity, the technology, knowledge and other service providers together to deliberate the latest developments and future agenda for banks in india. it is indeed a great pleasure to be amongst you here today. the banking landscape of india is changing rapidly. with the evolution of technology, the entire industry has undergone a massive transformation that has changed the way financial procedures are carried out, and the way financial institutions operate. the collaboration between finance and technology has led to a radical change in several aspects of banking. financial technology is said to be a disruptive force that in the future is expected to reshape the financial sector, business models and banking structures. this paradigm change has posed significant challenges to the banks as well as the regulators. one of the important challenges is ‘ compliance ’ ; a very important aspect for sustainable success story for any banking and financial system. i am going to share my thoughts on this aspect today. compliance is defined as the act of following laws, rules, regulations, and various codes of conducts including the voluntary ones. although most of these arise from external requirements, following the organization ’ s own internal rules, policies, and procedures, acting in accordance with ethical practices is equally important. a strong compliance culture should also ensure adherence to fair practice codes, manage conflicts of interests, and treat customers fairly, with the larger objective of delivering efficient customer service. thus, compliance shall go beyond what is legally binding and embrace broader standards of integrity and ethical conduct. benefits of good compliance culture it is very important for banks to demonstrate a good compliance culture to maintain their reputation and win the trust of customers, investors and regulators. such culture is important for banks to avoid poor conduct and loss of trust. a good compliance culture can benefit banks in several ways 1 ; which includes : i ) low organizational and individual risk ; ii ) low reputational risk ; iii ) less hesitance and more confidence among employees while performing their jobs ; iv ) helps attract and retain talent and ensure employee engagement. v )