Sunday 1 Aug 2021


Compliance Management, as an independent Department in the bank, is acting under supervision of the Compliance Committee and is responsible for complying of the Bank's activities with the relevant rules, regulations and standards.
As this is quite essential for any Iranian Banks after JCPOA, Bank Mellat has taken in to consideration the very importance of such critical concept in the Bank and defined the structure duly in the organization. 

AML Activities 


Bank Mellat maintains a risk-based approach to combat money laundering& financing terrorism activities by using risk sensitive AML& CFT policies and procedures. These policies are designed to establish a balance between customers' risks, the scope of standards, customer's due-diligence and continuous monitoring of the customers' accounts, transactions and activities.
- Presentation of cash transaction reports (CTR)& the suspicious transaction reports (STR) to the relevant authorities.
- KYC& CDD processes and identification of customers through authentic& reliable national data bases.
- Exchanging KYC questionnaires with foreign correspondents institutions for the purpose of establishing correspondent relationships.
- Prohibition of cash payments/deliveries (Rials-Forex) above the threshold.
- Using AML& RBA systems in order to monitor transactions of the customers
- Having an annual-based training program, to update the staff about the AML& CFT policies, procedures, and examples of money-laundering cases.

Performance of Audit Committee

Audit Committee was established by approval of board of directors and its statute was approved on 23/7/2008. Goals, structure, formation, duties, responsibilities, and meetings are identified in the statute. The main goals and responsibilities of Audit Committee are:
- To monitor financial reporting
- To check correctness of financial statements
- To place internal control system
- To consider rules and regulations
- To do internal audit
- To monitor professional qualification and independence of independent auditors

Members of Audit Committee are:

- Board Chairman as chairman
- One of the bank experts
- Two official accountants
- One accounting PhD out of bank
- Accounting Manager as member and secretary of committee There have been 42 meeting for Audit Committee in 2013, which the main actions are:
1. To study financial and audit reports, financial statements, budget, performance, claims, tax, and management letter.
2. To study internal audit reports of General Logistics Department, management of operations, organization and improvement of methods, staff affairs, investment, companies affairs, management of branches of district 5, and case audit reports. 
3. To study and settle incompatibilities between management and independent auditor before final report.
4. To study annual performance report of internal audit management.
5. To study settlement of open entries in temporary debt and credit accounts and their control and follow-up methods.
6. To study budgeting and contracting for budgeting system; to control budget in Bank Mellat
7. To study integration of financial, operational, and information systems of Bank Mellat
8. To study obligations of retirement fund, and sufficiency of reserves for doubtful claims
9. To study reports of internal audit recommendations
10.To require reporting of departments and to study those reports 

Internal Audit Management Performance

1. In Operational Deputy section, 7 general administrations and operational cycles that were in the audit plan of 2013, were audited for about 924 person-day in 2013.
2. Fulfillment of preparation phase in IT Deputy with cooperation of Padid Pardaz Pardis Co.
3. In IT field, 11 IT projects were initiated during 2013 by cooperation of Padid Pardaz Pardis Co., which were progressed 80% up to the end of 2013.
4. To follow-up execution of audit recommendations monthly, and to report it to relevant manager, Audit Committee, and operational plan meetings for about 464 work days.
5. To execute audit missions allotted by Audit Committee, Assistants Council, and Board of Directors, for about 764 work days, including submission of complementary report of Audit Management about redemption of leave in deprived regions for years 1989-1997; study of financial statements of Pars Fund; bond process; study of IT report for facilities, claims and obligations; comments on statute of Asset and Debt Management Committee; report of exchange resources and consumptions of bank and offering it to Exchange Committee for responding to the items for inspection of inspectors of Central Bank. 
6. To study draft of accounting reports, management letter, etc. to submit to Audit Committee
7. To consult with different departments for their operational activities 8. To provide reports for personal facilities, obligations and submission to Central Bank.

Risk Management

Sovereignty structure of risk management

Sovereignty structure of risk management in Bank Mellat is a subset of bank’s sovereignty structure and includes Board of Directors, Higher Committee of Risk Management, Technical Committee of Risk Management, Risk Management Administration, working units and internal audit.
This structure determines strategy, approach, risk control and management. This structure contains definitions of risk management approaches,structures, and processes in business goals. Some of the features of risk sovereignty structure are a transparent definition from responsibilities and expectations of all departments, including board of directors, manages, and staff. Modification of business model from traditional to integrated banking, has changed approach of bank management towards risk-based management. In this new pattern, Bank Mellat offers its services to respond different (banking, financial, insurance, investment,…)
requirements and profitability. In the new business model, trade behavior of bank is based on “risk-return” principle. Bank Mellat believes that risk culture must flow in the entire of organization. Therefore, it selected and trained risk interfaces in different departments to maintain continuous communication and to identify and control key risks. Bank Mellat holds training courses to increase organizational knowledge of staff about risk management and has implemented risk management units in all business departments.

Risk Management Higher Committee

One of the most important columns of risk sovereignty structure in Bank Mellat
is Risk Management Higher Committee, which has an independent nature. Some of the duties of this committee are:
- To design and propose risk tolerance and demand level to board of directors
- To apply risks in redaction of bank’s strategies
- To study submitted reports about major risks in bank operations
- To evaluate fulfilled actions against reported risks
- To offer necessary proposals to board of directors

Risk Management Higher Committee uses Risk Management Technical

Committee views to redact policies and strategies for risk management. In 2013, Risk Management Higher Committee and Risk Management Technical Committee held 13 meetings and issued 67 and 64 approvals, respectively.

Risk Management Department

Risk Management in Bank Mellat has an independent and concentrated structure and examines and reports strategic, market, credit, operational, compatibility, liquidity, and financial risk. Risk Management Department uses Ball Committee guidelines and standards to optimize capital usage and to maximize equity of stockholders. Regarding the effects of major economic vari ables on bank’s performance, Risk Management Department anticipates
these variables such as inflation rate, real economy growth rate, liquidity volume, the effects of “Purposeful Subsides Law”. This department redacts many credit and investment strategies according to market risk situation. Bank Mellat monitors indices such as adjusted return to risk index, money finished price increment risk, bank profit quality, liquidity split situation,
exchange items risk, assets quality risk, etc. to recognize and evaluate the existing risks in the financial structure of bank. Regarding to the important role of some indices such as RAROC and money finished price risk in policy-making, these indices are evaluated in branches management levels too. Meanwhile, Camels Ratios are evaluated in this bank to improve capital sufficiency risk, assets quality risk, profitability, liquidity and market. To decrease liquidity risk, risk appetite limit (expected return), and combination of liquidity reserves, credit limits are determined. Also, the above mentioned risk management program was executed in 8 areas in order to decrease human resources risk. Other actions of Risk Management Department are monitoring capital sufficiency, studying comparative risks for all bylaws, and monitoring laws and regulations of authorities.

Liquidity risk management

By effective liquidity risk management, Bank Mellat could use profitability opportunities created by optimization of liquidity resources.
ed: keramat.9608