Supervisory control and its impact on the banking compliance observer

An applied study in a sample of Iraqi banks

Abstract

Supervisory control is one of the most important functions of the Central Bank of Iraq. Through which it aims to create a strong and sound banking system, and this control was exercised over banks before. Inspection teams to ensure their compliance with laws and regulations, banking orders and instructions, the integrity of their financial positions and their banking reputation.

This study aimed to clarify the concept of supervisory control and compliance observer and the extent of the influence of supervisory control on the compliance observer and what are the responsibilities and duties that fall on each of the supervisory control committee teams and the compliance observer's employees, and after reviewing the various theoretical aspects related to the supervisory control and the compliance observer, the research work on the practical side On the preparation of a questionnaire consisting of a set of questions that fit the hypothesis set by the researcher, and the research sample included the Department of Control and Inspection in the General Directorate of Banking and Credit Supervision of the Central Bank of Iraq, Rafidain Bank, International Development Bank, and Khaleej Commercial Bank. The research found results that indicate that proper banking supervision is a prerequisite for the continuity of banking activity and that it consists of a mixture of office supervision, cooperative supervision and field supervision (for inspection), where the Central Bank of Iraq exercises the function of supervisory oversight on the performance of banks to see the extent of their compliance with banking legislation, as well as the presence of weakness In my dimension (competence, experience, level of awareness of compliance dimensions) where it was observed that most of the compliance monitors did not attend. For training courses held by the Central Bank of Iraq, which affects. Negatively their level of qualification to perform the job of compliance observer, and there are no controls or procedures. It ensures that their attendance in these courses is mandatory. The research ended with recommendations, the most important of which is, the Central Bank of Iraq should pay attention to developing the capabilities of the compliance monitoring department’s staff by introducing the compliance observer and his employees in specialized development and training courses to increase efficiency, experience and awareness, and engaging compliance monitors with training courses outside Iraq to deepen their expertise and benefit from the experiences of banks in other countries.