NABARD - National Bank For Agriculture And Rural Development

Circulars

Off-site Surveillance System: Publication of new return

EC No. 29/ DoS- 02/2022

25 February 2022

Ref. No. NB. DoS. HO./ 4426/ENSURE /P-177 / 2021-22

The Managing Director, All State Cooperative Banks
The Managing Director/Chief Executive Officer, All District Central Cooperative Banks

Dear Sir/Madam,

Off-site Surveillance System: Publication of new return

Please refer to our circular No. NB.DoS.HO/OSS/3769/P.63/2014-15 dated 04 March 2015 wherein banks were advised to submit OSC 1 to 9 and FMS returns on-line through ENSURE portal of NABARD from March 2015 onwards as per the prescribed frequency. The objective of requiring banks to submit off-site surveillance returns at regular intervals is to monitor their financial position and other qualitative developments on a continuous basis and to advise them on areas of regulatory and supervisory concerns, if any, observed from such a data/ information.

2. Further, we also invite your attention to letter No.NB.DoS. HO/OSS /2477/P.177/2016-17 (Circular No. 253/DoS-31/ 2016) dated 25 October 2016 wherein Performance Assessment Reports (PAR) from ENSURE Portal on submission of OSS returns were made available for banks. The PAR is designed as a management feedback tool for self-monitoring of a bank’s performance on a continuous basis. The banks have to place the PAR before their Board and the plan of action drawn up or corrective action initiated, based on the PAR, need to be communicated, from time to time, to our Regional Office.

3. On a review of OSS Returns, it has been decided to introduce a new return named “OSC-10” (proforma given in annexure) to capture information on qualitative parameters and a few other unaudited/audited data. The return is to be uploaded on a quarterly-basis. The first of such return is published for the quarter ending 31 December 2021, which may be submitted latest by 10 March 2022. The due date for OSC-10 would be fifteen (15) days from the end of the quarter.

4. All banks are advised to ensure submission of the prescribed return through ENSURE portal on an ongoing basis

5. Based on this return and other OSS/FMS returns containing quantitative data, Early Warning Signals (EWS) will be generated and sent to banks pointing out the areas of non-compliance, issues of concern, etc. to enable Supervised Entities (SEs) to initiate necessary follow up action on the warning signals immediately on receipt of the same. Compliance on warning signals may be submitted to the Board in their meeting held immediately after receipt of the EWS. Board approved compliance report on the warning signals may be submitted by the SEs to the Regional Offices of NABARD within fifteen (15) days from the date of meeting of the Board.

6. The marks available for ‘compliance parameters’ in the supervisory rating mechanism will include the periodic compliances to OSS warning signals.

7. We reiterate that all the returns prescribed under Off-site Surveillance System (OSS) may be certified by the CEO and Compliance Officer of the SEs to ensure that the banks attach significant importance to timeliness and accuracy in submission of the OSS returns.

8. Further, the OSS / FMS returns are prescribed by NABARD in exercise of the powers conferred under Section 27(3) of Banking Regulation Act, 1949 (AACS) and are hence statutory in nature. The SEs should ensure submission of these returns as per the schedule prescribed without fail. Non-submission / wrong reporting in these returns attracts penalties as specified in the Act, ibid.

9. Please acknowledge receipt of this circular to our Regional Office concerned.

Yours faithfully

Sd/-
(K.S. Raghupathi)
Chief General Manager

Encl: Annexure

Annexure

Format of OSC-10 return

Sl. No.	Component		Parameter	Value
1	CRAR		Whether the CRAR of the bank has slipped below 9.0% any time during the quarter?	(Y/N)
2	Capital		Whether the Capital of the bank has decreased drastically from March Qtr. (decrease in Capital is more than 10% from March position)?	(Y/N)
3	RWA		% Increase (+) / Decrease (-) in Risk Weighted Assets	(9,2)
4	Fit & Proper Criteria	a	Whether CEO of the bank fulfils ‘Fit and Proper’ criteria prescribed by RBI?	(Y/N)
4	Fit & Proper Criteria	b	Whether the Board satisfies the ‘Fit and Proper’ criteria as per the provisions of B R Act, 1949 as amended in 2020?	(Y/N)
5	Board meetings	a	Whether Board meetings were held during the quarter as specified in the Act provisions/ stipulation?	(Y/N)
5	Board meetings	b	Whether Performance Assessment Report (PAR) was placed in Board meetings?	(Y/N)
6	Board Level Committees		Whether the following Board level Committees are in place	-
		a	Audit Committee	(Y/N)
		b	Asset Liability Committee (ALCO)	(Y/N)
		c	Loan Committee/Credit Committee	(Y/N)
		d	Investment Committee	(Y/N)
		e	Risk Management Committee	(Y/N)
		f	Fraud Prevention and Monitoring Committee	(Y/N)
7	Meetings of Committees		Whether meetings of the following Committees conducted during the quarter?	-
		a	Audit Committee	(Y/N/ NA)
		b	Asset Liability Committee (ALCO)	(Y/N/ NA)
		c	Loan Committee/Credit Committee	(Y/N/ NA)
		d	Investment Committee	(Y/N/ NA)
		e	Risk Management Committee	(Y/N/ NA)
		f	Fraud Prevention and Monitoring Committee	(Y/N/ NA)
8	Board / Committees - Agenda items		Whether the bank followed the Calendar of agenda items, as indicated in the guidelines of NABARD, in the Board meetings held during the quarter?	(Y/N)
9	Liquidity	a	Whether the bank committed any CRR default during the quarter?	(Y/N)
9	Liquidity	b	Whether the bank committed any SLR default during the quarter?	(Y/N)
10	Funding Liquidity		Whether the bank has defaulted to any higher financing agency during the quarter?	(Y/N)
11	Periodic Reconciliation	a	Whether payment settlement is reconciled on a regular basis?	(Y/N)
11	Periodic Reconciliation	b	Whether pendency in reconciliation is less than three consecutive days?	(Y/N)
12	IS Audit Policy		Whether the bank has Board approved Information System (IS) Audit Policy in place?	(Y/N)
13	IS Audit	a	Whether Annual IS Audit done for the previous year?	(Y/N)
13	IS Audit	b	Whether Annual IS Audit process for the current year has been activated?	(Y/N)
14	Audit Compliance	a	Whether compliance to statutory audit was ensured within the time frame?	(Y/N)
		b	Whether statutory audit is a qualified audit report?	(Y/N)
		c	Whether there are any observations pending for rectification/compliance in respect of statutory audit?	(Y/N)
15	Internal Inspection	a	Whether there is a policy for Internal inspection?	(Y/N)
15	Internal Inspection	b	Whether there are arrears in conduct of internal inspection for the previous quarter as per Bank's policy?	(Y/N)
16	Internal Audit / Concurrent Audit	a	Whether internal audit / concurrent audit policy is in place?	(Y/N)
16	Internal Audit / Concurrent Audit	b	Whether there are arrears in conduct of internal audit / concurrent audit?	(Y/N)
17	Domain Email-Id		Whether the bank has set-up domain email id?	(Y/N)
18	Inter-Bank Reconciliation		Whether any entries are pending for reconciliation in Inter-Bank accounts for more than 15 days?	(Y/N)
19	Inter-Branch Reconciliation		Whether any entries are pending for reconciliation in Branch Adjustment accounts for more than three months?	(Y/N)
20	Migration	a	Whether bank had migrated to any new CBS system?	(Y/N)
20	Migration	b	If yes, whether bank had conducted migration audit?	(Y/N/ NA)
21	Migra account	a	Whether reconciliation of Migration account has been completed?	(Y/N)
21	Migra account	b	Whether any balance is outstanding in Migration Account?	(Y/N)
22	Grievance Redressal Mechanism		Whether Grievance Redressal Mechanism is in place?	(Y/N)
23	Complaints		Whether any Complaints remained pending for more than 60 Days?	(Y/N)
24	Frauds		Whether any new fraud has been detected by the bank during the quarter?	(Y/N)
25	Reporting		If fraud was detected, whether the FMS return has been submitted?	(Y/N/ NA)
26	Central Economic Intelligence Bureau (CEIB)		Whether the bank has furnished information to Central Economic Intelligence Bureau (CEIB)?	(Y/N)
27	AML-CFT		Did the bank submit CTR Returns (including NIL return) in the quarter, as required?	(Y/N)
28	AML-STR		Did the bank submit STR Returns (including NIL return), if any, in the quarter, as required?	(Y/N)
29	AML-NTR		Did the bank submit NTR Returns (including NIL return) in the quarter, as required?	(Y/N)
30	Inspection Compliance	a	Whether compliance to Inspection findings of NABARD has been submitted, if due, in time?	(Y/N/ NA)
30	Inspection Compliance	b	Whether further compliance to Inspection findings of NABARD has been submitted, if due, in time?	(Y/N/ NA)
31	Policy & Implementation	a	Whether any un-secured guarantees were issued by the bank during the previous quarter?	(Y/N)
		b	Whether any Letter of Credits (LCs) were issued by the bank during the previous quarter?	(Y/N)
		c	Whether any bank guarantees were invoked but not paid during the previous quarter?	(Y/N)
32	Returns		Whether the bank has submitted statutory returns including OSS returns within due date?	(Y/N)
33	RBI Direction / Penalty	a	Whether RBI has imposed any restrictions?	(Y/N)
		b	Whether RBI has issued any Direction?	(Y/N)
		c	Whether RBI has imposed any penalty?	(Y/N)
34	Sanctioning		Whether any director of the bank has been sanctioned any unsecured loan?	(Y/N)
35	Exposure Norms	a	Whether the bank has submitted the CMA returns (including NIL return) for the previous quarter?	(Y/N)
		b	Whether the bank has violated CMA Sectoral exposure norms?	(Y/N)
		c	Whether the bank has violated any of the below indicated exposure norms in case of housing sector (i) ceiling on individual exposure of Rs.20 lakh if networth is upto Rs.100 crore and Rs.30 lakh if networth is above Rs.100 crore (ii) sectoral ceiling upto 5 % of total assets at the end of the previous year	(Y/N)
		d	Whether the bank has violated CMA unit-wise exposure Norms?	(Y/N)
		e	Whether the bank has violated CMA individual exposure Norms?	(Y/N)
36	Credit Information Companies (CICs)	a	Whether the bank has taken membership in all four Credit Information Companies?	(Y/N)
		b	Whether the bank has submitted data (including historical data) to all the four Credit Information Companies?	(Y/N)
		c	Is the bank periodically updating credit information at monthly or at such other shorter intervals as mutually agreed between them?	(Y/N)
		d	Whether credit history of the borrowers are verified from CIC data warehouse while appraising loan proposals?	(Y/N)
37	Depositors Education and Awareness (DEA) Fund Scheme, 2014	a	Whether the bank has put in place a system for identifying amounts transferable to the DEA Fund as per the scheme guidelines?	(Y/N)
		b	Whether the bank has transferred the unclaimed deposits to DEA Fund on annual basis?	(Y/N)
		c	Whether the amount transferred shown as contingent liability and reported in Notes on Accounts?	(Y/N)
		d	Whether the bank has submitted the annual return within 30 days from the end of the calendar year to the Reserve Bank of India?	(Y/N)
		e	Whether the bank has ensured permanent storage of account details and transactions of all accounts in respect of which funds have been transferred to the DEA Fund, RBI	(Y/N)
		f	Whether the banks are displaying the list of unclaimed deposits/inoperative accounts which are inactive/inoperative for more than 10 years in their branch premises/website?	(Y/N)
		g	Whether the bank had transferred the amount becoming due in each calendar month during the previous quarter?	(Y/N)
38	Compliance	a	Name of the Compliance Officer	Text

Y: Yes N: No NA : Not Applicable