RBI focusing on sharper off-site surveillance, says Shaktikanta Das

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Published: February 25, 2020 1:00:41 AM

Das said a sup-tech (supervisory technology) initiative was being implemented as part of the integrated compliance management and tracking system.

The governor said the regulator was looking to deploy a range of tools and technology to meet its supervisory objectives.The governor said the regulator was looking to deploy a range of tools and technology to meet its supervisory objectives.

Reserve Bank of India (RBI) governor Shaktikanta Das on Monday said the central bank has been focusing on a “sharper and more forward-looking” off-site surveillance framework to aid its on-site supervision.

Das said a sup-tech (supervisory technology) initiative was being implemented as part of the integrated compliance management and tracking system. “This will facilitate transparent and efficient monitoring of all pending compliances of supervised entities through a web-based interface, automate the inspection planning process and cyber incident reporting, and ensure seamless collection of data,” he said in his address at an event organised by a business daily.

The governor said the regulator was looking to deploy a range of tools and technology to meet its supervisory objectives.

Pointing out various measures by the central bank to enhance supervision of financial entities, the governor said a “fifth pillar of supervision” has been instituted to gain a clear understanding of emerging risks and developments in the sector. “In addition to the four pillars of supervision viz on-site inspection, off-site surveillance, market intelligence and reports of statutory auditors, a fifth pillar of supervision in the form of periodic interaction with all the stakeholders — including statutory auditors, credit rating agencies, credit information companies, mutual funds and banks having large exposures to NBFCs — has been instituted,” he said.

Das further said the Indian banking sector is slowly turning around on the back of improvements in asset quality, following enhanced resolutions through the Insolvency and Bankruptcy Code (IBC). “Despite the recent decline in impaired assets and a significant improvement in provisioning, profitability of the banking sector remains fragile,” he said, adding that the sector continues to face challenges in the telecom sector.

Amid the changing landscape of the banking sector, the governor said that the regulators have to focus on achieving a balance between promoting innovation and applying a measured and proportional supervisory and regulatory framework.

“As the Indian banking sector is propelled forward to a higher orbit, banks would have to strive hard to remain relevant in the changed economic environment by reworking their business strategies, designing products with the customer in mind and focusing on improving the efficiency of their services,” he said.

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