Murlidhar Lakhara: A Trailblazer in Facilitating Strategic Compliance Risk Management
Murlidhar Lakhara
Chief Compliance Officer
An industry veteran with experience rich history from working at Reserve Bank of India and other leading financial institutes, Murlidhar Lakhara, Chief Compliance Officer(CCO), IndusInd Bank, has an eye for details and offers solution oriented approach to find the ways within the regulatory framework.
"From managing regulatory framework to being appointed a supervisory role and conducting regulatory inspection of foreign banks, private banks and a financial institution, myresponsibilities have evolved over the years"
Engaging in a one-to-one interactions with the team of CEO Insights magazine, Murlidhar shares his journey and success story within the Indian finance industry.
Highlight upon your educational and professional background. What are your unique skill sets and strengths that differentiate you from your peers in the industry.
I have completed my post-graduation in Financial Management from Jamnalal Bajaj Institute of management studies and Bachelors in Law from Mumbai University. I started my career with RBI, where I worked for more than a decade before changing the pursuits to the commercial banking arena in 2005. I have handled regulatory framework of bank finance for rehabilitation of non SSI sick/weak industrial unit, post which I was posted in Department of Banking Supervision for setting-up Market Intelligence unit which played a crucial role in the investigation of Indian stock market manipulation scam in 2001 by associating with SEBI, EOW, CBI and the Joint Parliamentary Committee.
From managing regulatory framework to being appointed a supervisory role and conducting regulatory inspection of foreign banks, private banks and a financial institution, my responsibilities have evolved over the years. Especially, this stint of supervision of various banks provided me the opportunity to understand commercial banking from the regulatory point of view and the practical aspects of banking vis-à-vis regulatory expectations. Enriched with regulatory and supervisory experiences, I decided to transition into commercial banking by taking-up the role of the Compliance Officer in a Netherland based bank operating in India in 2005. My journey encompasses varied experience at the regulatory authority, foreign banks and now with one of the five largest private banks in India. I think this is what sets me apart from the rest.
How do you ensure setting of strategy, achievement of goals, optimization of performance and management of major projects? How have your strategies transformed Induslnd Bank's work culture and client relationships?
Understanding banking operations to the core was a challenging task when I tookup role of compliance officer in a foreign bank. However, over the years, I had to relearn banking from commercial banking perspective to understand the challenges faced by financial institutions in India. While ensuring that each and every activity/process performed by the bank officials meets 100 percent of ever enlarging regulatory expectations amidst some incidents in banking sector was a challenge. My experience of supervision of banks at Reserve Bank of India came-in handy in overcoming the challenges and bringing a regulatory perspective to the banks wherever I have worked.
Once I took-over as a Compliance Officer, I was a part of various working groups that are assigned for implementing major projects. The strategy is determined through a consultative approach that involves all the stakeholders, and compliance was one of the key stakeholder as all projects should pass the tests of regulations and statutes. A review is undertaken by Compliance Department roughly after six months of implementation
of a project or a product to evaluate if the project is functioning as per the intended purpose and within the regulatory framework. Added to this is the continuous monitoring and testing of various processes and operations to ensure that they meet the regulatory expectations.
As a CCO of a large bank, my first priority is to ensure that there is no compromise in culture of compliance across the bank. I brought significant change in the structure of the Compliance Function to ensure that all departments/units of the bank are aligned to compliance philosophy with central oversight by Compliance Department. Integration of Compliance with all top level committees has ensured that the decisions are taken with compliance as a priority and proper & clear message of compliance is percolated till the end-user. The message that everyone in the bank is responsible for ensuring compliance with regulations, laws and internal processes has been continuously emphasized. This resulted in the confidence of the customers in the bank growing in all vectors despite all the odds faced by the bank due to incidences in the banking sector during the last two years.
What are the key risks and vulnera bilities that business are facing at present? Tell us about the new areas of regulation that you think can impact the business?
There has been a paradigm shift in the way the banks are functioning today, especially due to digitization of payment channels, automation, integration of banking with internet & mobile networks and the FinTech platforms. However, along with convenience and the speed of doing banking business, these transformations have also exposed the banks and their customers to increased risks of cyber frauds, theft of customer data, identity theft, malware & ransom ware attacks and more. Numerous banks across the globe are incurring high losses on the account of cyber risks in spite of considerable investments in technology and security systems. Owing to this, the ever enhancing regulatory standards and new regulations in the areas of Information Technology and Cybersecurity require further investments in security aspects which consumes size able amount of the capital and revenue of the banks. Hence, it is a triple whammy for banks high investment in technology & cybersecurity, pressure on revenue due to low cost offering of banking products, and the losses due to cyber frauds. Undoubtedly, these factors are causing substantial pressure on business of the banks in addition to the inherent risks like credit risk, market risk and operational risk.
Can you highlight upon some of the latest technologies deployed in the management of regulatory compliances to benefit the organizations?
Today, there are numerous banks that are using Enterprise Governance Risk and Compliance(EGRC)software for the management of compliance risks along, as well as the management of other risks. Some of these EGRC software integrate regulatory compliances as part of compliance management module on the platform. In my opinion, the regulatory compliance should be embedded in overall risk management system adopted by an organization for a holistic oversight on implementation of regulatory guidelines. Thus, an integrated and good EGRC system adequately serves the purpose of management of regulatory compliance. For analytics in the areas of compliance and AML transactions monitoring, the new age technologies i.e. Artificial Intelligence and Machine Learning are also being explored by various organizations including global consultancy firms.
In your journey so far, which are the milestones that bestowed you with utmost satisfaction both as an individual and a CCO?
My career path with RBI is the most important factor in my life which has provided me the required regulatory acumen and strength to reach the level of a CCO of one of the largest banks in India. I could not have achieved this feat without the rich experience which I gained at RBI. My journey after RBI is full of experience of varied cultures at foreign banks. Apart from that, the appreciations from the top management in RBI for formulating guide lines and reports relating to bank finance for rehabilitation of industrial units and the role of Board of Industrial & Financial Reconstructions(BIFR)also has the crucial role in keeping top management updated with market intelligence.
My career path with RBI is the most important factor in my life which has provided me the required
As a CCO of a large bank, my first priority is to ensure that there is no compromise in culture of compliance across the bank. I brought significant change in the structure of the Compliance Function to ensure that all departments/units of the bank are aligned to compliance philosophy with central oversight by Compliance Department. Integration of Compliance with all top level committees has ensured that the decisions are taken with compliance as a priority and proper & clear message of compliance is percolated till the end-user. The message that everyone in the bank is responsible for ensuring compliance with regulations, laws and internal processes has been continuously emphasized. This resulted in the confidence of the customers in the bank growing in all vectors despite all the odds faced by the bank due to incidences in the banking sector during the last two years.
My experience of supervision of banks at reserve bank of india came-in handy in overcoming the challenges and bringing a regulatory perspective to the banks wherever i have worked
What are the key risks and vulnera bilities that business are facing at present? Tell us about the new areas of regulation that you think can impact the business?
There has been a paradigm shift in the way the banks are functioning today, especially due to digitization of payment channels, automation, integration of banking with internet & mobile networks and the FinTech platforms. However, along with convenience and the speed of doing banking business, these transformations have also exposed the banks and their customers to increased risks of cyber frauds, theft of customer data, identity theft, malware & ransom ware attacks and more. Numerous banks across the globe are incurring high losses on the account of cyber risks in spite of considerable investments in technology and security systems. Owing to this, the ever enhancing regulatory standards and new regulations in the areas of Information Technology and Cybersecurity require further investments in security aspects which consumes size able amount of the capital and revenue of the banks. Hence, it is a triple whammy for banks high investment in technology & cybersecurity, pressure on revenue due to low cost offering of banking products, and the losses due to cyber frauds. Undoubtedly, these factors are causing substantial pressure on business of the banks in addition to the inherent risks like credit risk, market risk and operational risk.
Can you highlight upon some of the latest technologies deployed in the management of regulatory compliances to benefit the organizations?
Today, there are numerous banks that are using Enterprise Governance Risk and Compliance(EGRC)software for the management of compliance risks along, as well as the management of other risks. Some of these EGRC software integrate regulatory compliances as part of compliance management module on the platform. In my opinion, the regulatory compliance should be embedded in overall risk management system adopted by an organization for a holistic oversight on implementation of regulatory guidelines. Thus, an integrated and good EGRC system adequately serves the purpose of management of regulatory compliance. For analytics in the areas of compliance and AML transactions monitoring, the new age technologies i.e. Artificial Intelligence and Machine Learning are also being explored by various organizations including global consultancy firms.
In your journey so far, which are the milestones that bestowed you with utmost satisfaction both as an individual and a CCO?
My career path with RBI is the most important factor in my life which has provided me the required regulatory acumen and strength to reach the level of a CCO of one of the largest banks in India. I could not have achieved this feat without the rich experience which I gained at RBI. My journey after RBI is full of experience of varied cultures at foreign banks. Apart from that, the appreciations from the top management in RBI for formulating guide lines and reports relating to bank finance for rehabilitation of industrial units and the role of Board of Industrial & Financial Reconstructions(BIFR)also has the crucial role in keeping top management updated with market intelligence.
My career path with RBI is the most important factor in my life which has provided me the required
regulatory acumen and strength to reach the level of a CCO of one of the largest banks in India. I could not have achieved this feat without the rich experience which I gained at RBI. My journey after RBI is full of experience of varied cultures at foreign banks. Apart from that, the appreciations from the top management in RBI for formulating guidelines and reports relating to bank financefor rehabilitation of industrial units and the role of Board of Industrial & Financial Reconstructions (BIFR) also has the crucial role in keeping top management updated with market intelligence.
Involvement in investigations by JPC has bestowed me with utmost satisfaction at RBI. During my journey in banking sector, my engagement and contribution in various strategic projects such as successful transition of credit cards portfolio to other banks, rationalization of retail banking business of a foreign bank in India, effectively setting-up integrated transaction monitoring systems, and revamping the compliance function structure have kept-up my enthusiasm and zeal as a compliance professional.
Overseeing and managing compliance issues within an organization brings a lot of stress and implies rich skills &time. How do you manage to balance your personal & professional life?
I must admit that there has been a lot of skewness towards professional life of late due to change in leadership and various challenges faced by the bank during the last 18 months. However, I am able to cope-up with these challenges owing to the total understanding and support of my family with the relentless dedication of my colleagues in the Compliance Department and the confidence of the Board and top management of IndusInd Bank in my capabilities due to which I could keep my head up amidst any situation. Also, reading books on various subjects, a little bit of photography and watching exploratory videos become stress buster for me.
How do you update yourself with the latest industry trends and technologies? What motivates you to continue growing and developing as a professional? What is your success mantra?
While I might not have been engaged in any sort of mentorship programs outside my organization, I constantly keep providing career guidance and help to the right candidates to help launch their career. I keep myself updated with the latest industry trends & technologies through news feeds, seminars and discussion with my peers in the industry, with the consulting firms and with the Fintech organizations.
Adding to this, I also have got the privilege of working with some of the best CEOs in the banking industry who have provided me total independence and autonomy to function as Chief Compliance Officer. Their style of functioning, acumen, focus on the goals and the zeal of to be on top of every aspects of banking and finance constantly influences me to do a lot during my career, which is also the success mantra for me. I believe in the philosophy that adversities bring opportunities and our decision to focus on any of them determines the outcome.
In the years to come, the increasing focus of compliance strategy would ensure sustenance of compliance culture and philosophy, resulting in continued confidence by the customers, shareholders, regulatory authorities and the stake holders in the bank. This confidence is sure to bring growth and sustenance for an organization.
MurlidharLakhara,CCO, IndusInd Bank
Belonging to a small farmer family of Rajasthan, my education and the first job in Reserve Bank of India took place in Ahmedabad since my father migrated to Ahmedabad for taking-up job in a Tata Group company Voltas. It was in 1997 when I got selected as Manager in Reserve Bank of India that we moved to Mumbai. Today, I am married to a wonderful person Bharti without whose sacrifices and support I could not have achieved the milestones in my life. We are also blessed with two sons Kunal and Ashish, who are engaged with MNCs.
QUICK FACTS:
Hobbies:Watching exploratory videos and reading books whenever I get leisure time. Along with it, I love long drives and some days, I also lay my hands on photography.
Favourite Cuisine:I do not consider myself as a `foodie' person. While all in my family are vegetarians by design, we like Rajasthani, Gujarati and vegetarian continental cuisines. South Indian food is also an all time choice when Rajasthani and Gujarati dishes are not in reach.
Favourite Book:Anti-Fragile' by Nassim Nicholas Taleb
Travel Destination:I have visited Singapore, Hong Kong, Lisbon, Frankfurt, Cape Town, Istanbul, Johannesburg, and Hamburg. My favourite is Istanbul, which is a unique combination of western and eastern cultures, and also has modernity and history.
Involvement in investigations by JPC has bestowed me with utmost satisfaction at RBI. During my journey in banking sector, my engagement and contribution in various strategic projects such as successful transition of credit cards portfolio to other banks, rationalization of retail banking business of a foreign bank in India, effectively setting-up integrated transaction monitoring systems, and revamping the compliance function structure have kept-up my enthusiasm and zeal as a compliance professional.
Overseeing and managing compliance issues within an organization brings a lot of stress and implies rich skills &time. How do you manage to balance your personal & professional life?
I must admit that there has been a lot of skewness towards professional life of late due to change in leadership and various challenges faced by the bank during the last 18 months. However, I am able to cope-up with these challenges owing to the total understanding and support of my family with the relentless dedication of my colleagues in the Compliance Department and the confidence of the Board and top management of IndusInd Bank in my capabilities due to which I could keep my head up amidst any situation. Also, reading books on various subjects, a little bit of photography and watching exploratory videos become stress buster for me.
How do you update yourself with the latest industry trends and technologies? What motivates you to continue growing and developing as a professional? What is your success mantra?
While I might not have been engaged in any sort of mentorship programs outside my organization, I constantly keep providing career guidance and help to the right candidates to help launch their career. I keep myself updated with the latest industry trends & technologies through news feeds, seminars and discussion with my peers in the industry, with the consulting firms and with the Fintech organizations.
Adding to this, I also have got the privilege of working with some of the best CEOs in the banking industry who have provided me total independence and autonomy to function as Chief Compliance Officer. Their style of functioning, acumen, focus on the goals and the zeal of to be on top of every aspects of banking and finance constantly influences me to do a lot during my career, which is also the success mantra for me. I believe in the philosophy that adversities bring opportunities and our decision to focus on any of them determines the outcome.
In the years to come, the increasing focus of compliance strategy would ensure sustenance of compliance culture and philosophy, resulting in continued confidence by the customers, shareholders, regulatory authorities and the stake holders in the bank. This confidence is sure to bring growth and sustenance for an organization.
MurlidharLakhara,CCO, IndusInd Bank
Belonging to a small farmer family of Rajasthan, my education and the first job in Reserve Bank of India took place in Ahmedabad since my father migrated to Ahmedabad for taking-up job in a Tata Group company Voltas. It was in 1997 when I got selected as Manager in Reserve Bank of India that we moved to Mumbai. Today, I am married to a wonderful person Bharti without whose sacrifices and support I could not have achieved the milestones in my life. We are also blessed with two sons Kunal and Ashish, who are engaged with MNCs.
QUICK FACTS:
Hobbies:Watching exploratory videos and reading books whenever I get leisure time. Along with it, I love long drives and some days, I also lay my hands on photography.
Favourite Cuisine:I do not consider myself as a `foodie' person. While all in my family are vegetarians by design, we like Rajasthani, Gujarati and vegetarian continental cuisines. South Indian food is also an all time choice when Rajasthani and Gujarati dishes are not in reach.
Favourite Book:Anti-Fragile' by Nassim Nicholas Taleb
Travel Destination:I have visited Singapore, Hong Kong, Lisbon, Frankfurt, Cape Town, Istanbul, Johannesburg, and Hamburg. My favourite is Istanbul, which is a unique combination of western and eastern cultures, and also has modernity and history.