Independence of Assurance Functions; risk management, compliance and internal audit 24. Under the ‘three lines of defence’ model, Management and business functions form the first line while risk management and compliance form the second line. Internal Audit forms the third line of defence.
The assurance functions – risk management, compliance and internal audit – collectively assist the Board as well as the management to gauge whether the business operations of the bank are being run in conformity with the policies and strategies laid down by the Board. RBI has issued detailed guidelines for ensuring quality and independence of governance and assurance functions.