The key objective of the banking supervision is to ensure the safety of funds accumulated on bank accounts and guarantee compliance of banks' activities with the laws regulating banking activities. Among the tools used to meet banking supervision purposes are examinations conducted in banks.
The manual presents systematized principles for carrying out examination activities in banks deriving from legal regulations and principles of supervision laid down in the guidelines of the Basel Committee for Banking Supervision and the Committee of European Banking Supervisors (CEBS), with consideration given to best practices of supervision used by banking supervisors across the EU.
The manual is designed for the bank examiners as a practical guide and tool assisting examinations. Its scope covers the most important issues that are reviewed in the course of a full-scope or targeted on-site examination in banks, describes the whole of the activities relating to the examination process, both those with regard to the examination preparations, the conduct of the examination itself and the work on its results. Procedures set out in the manual discuss the examination of quantitative factors related to the risk level underlying banking operations and qualitative factors related to the manner risk is managed in the bank.
The procedures set out in the manual do not discuss all issues that may be examined in a bank. In larger banks which carry out more complex activities it may be necessary to widen the extent or specificity of the examination and include additional activities in the examination. On the other hand, some procedures discussed in the manual may be superfluous for the examination of smaller banks. Complying with procedures presented in the manual does not eliminate the need for examiners to apply their own professional judgement based on their expertise and experience and adjust them to the specific features of a given bank.
The manual consists of the following chapters:
Counteracting money laundering in banks
The manual takes consideration of legal regulations deriving, in particular, from Directive 2006/48/C of the European Parliament and of the Council of 14 June 2006 on the taking up and pursuit of the business of credit institutions and Directive 2006/49/EC of the European Parliament and of the Council of 14 June 2006 on the capital adequacy of investment firms and credit institutions. The manual is one of the instruments used in supervisory review and evaluation process (SREP) carried out under Pillar II of the NCA, consisting, among others, in the evaluation of banks capital adequacy, including internal capital assessment (ICAAP) and the assessment of the risk management and internal control systems. The manual encompasses regulations aimed at ensuring the application of the proportionality principle in the course of the examinations, which derives from the Directives and the standards laid down by the Basel Committee of Banking Supervision. This proportionality principle indicates the need for the banking supervisors to determine the frequency and scope of review and supervisory assessment with account taken of, among others, the size and character of the bank and the scale and complexity of its activities.
Banking supervision may not be held accountable for the consequences of using the manual for the purpose of managing the bank which result from a mechanical application of its content without taking into account the individual conditions and circumstances underlying the bank's activities. The manner of managing a bank should account for the bank's actual conditions and circumstances and the market situation. The manual only presents the framework of the supervisory process and must not be treated as a set of instructions related to risk management in banks. Neither does the banking supervision take any responsibility for using the content of the manual for developing procedures, instructions or internal by-laws in banks.