The Bank Policy Manual Definition
The Bank Policy Manual is the governing body of documentation that defines and clarifies a bank's policies and procedures. These manuals are generally divided into sections that identify a specific element within an organization (e.g., Administrative, Compliance, Lending, Operational, etc.), and are may be assigned a number series for identity purposes. Within these sections are numerous supporting policies and procedures that address various topics.
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Policies and Procedures
Policies and procedures are the heart of any Policy Manual, and it is important to understand the difference between a "policy" and a "procedure:"
Policy: A policy is a high level overall plan that embraces the general goals and directives of a bank. This type of document, and the related subject matter, requires the approval of senior management and the board of directors. As an example, topics dealing with human resources, lending guidelines, and regulations would normally be submitted to the board of directors for approval before implementation.
Procedure: A procedure is documented controlled steps or activities that accomplish the goals and directives of a related policy. Procedure documents are less formal by nature, and the subject matter normally requires only the approval of senior management. As an example, topics dealing with balancing teller cash, processing collections, or opening new accounts would not need board approval since these tasks are sufficiently controlled and monitored by bank management.
Exhibits are various pieces of support documentation that are used as attachments to a particular policy or procedure. The main purpose is to provide a source of reference related to the subject matter. Exhibits are presented in a variety of ways, such as forms, reports, diagrams, work tickets, contracts, and other materials. These documents are usually implemented as completed examples, using fictitious names, addresses, account numbers or dollar amounts to bring the point across. In short, an exhibit could be anything that trains, instructs or guides employees on how to complete a task or an assignment.
A manual is a living set of documentation, and it is not unusual for a properly written manual to remain without revision for extended periods of time. However, there may be instances when improvements, changes or alterations become necessary. Procedures, more often than policies, require periodic maintenance based primarily upon the recommendations of personnel who use them on a daily basis. Careful consideration must be applied to edits, updates or modifications to ensure that proper control is still maintained. The final authority for the acceptance of revisions or modifications lies with management.
Implementation and Training
Communication to affected personnel is an important part of implementing new or revised policies and procedures. An effective method of communicating and distributing these materials could be in the form of an internal newsletter, memorandum, or other type of official notice that circulates to employees within an organization. In addition to notification and distribution, training is an essential part of the education process. In some instances (usually dealing with regulatory issues), management must not only conduct training with staff but also provide evidence of that training. Documenting, recording and controlling training records is critical to ensure the success of a compliance audit.