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Supervisory Process

  • On-site inspections : DoS conducts periodical on-site inspections of StCBs, DCCBs, RRBs, SCARBDs, and other State Level Apex Institutions. These inspections focus on financial, managerial, operational aspects and the risk profile of the banks. Subsequently, DoS follows up to ensure compliance with the findings of the inspection. Besides the Head Office, certain regional/controlling offices and some branches are covered during inspection so as to ensure a minimum coverage of advances.
On-Site Inspection focuses on solvency, liquidity and operational health of the bank. While the compliance to the inspection findings is followed up in the usual course, NABARD addresses supervisory letters to the management of banks, State Governments, sponsor bank, etc., highlighting the major areas of supervisory concern that need immediate rectification and holds supervisory discussions to draw up an action plan, which can be monitored. All the inspected banks are rated as per supervisory ratings based on Capital Adequacy, Asset Quality, Management, Earnings, Liquidity, Systems and Compliance (CAMELSC)concept.
  • Off-Site Surveillance (OSS) : OSS has been introduced as a supplementary tool to on-site inspections. OSS aims to obtain and analyse critical data on a continuous basis to identify any areas of supervisory concern in the functioning of the supervised banks. Based on its analysis, the OSS issues early warning signals on any risk prone areas that require further action by the banks. The system basically envisages desk scrutiny of operations of Cooperative Banks and RRBs through a set of statutory and non-statutory returns. While the periodical statutory on-site inspections attempt an overall evaluation of the performance of the banks within a stipulated period, off-site surveillance envisages continuous supervision which will supplement the on-site inspections
  • Supplementary Appraisal/Portfolio Studies : These activities supplement regular on-site inspections/off-site surveillance and are undertaken if the inspections/surveillance give out specific signals about potential issues.
  • Credit Monitoring Arrangement (CMA) : CMA monitors sector-wise and unit-wise borrower exposure of cooperative banks in specified cases on a continuous basis.
  • Monitoring Frauds and Misappropriations : DoS monitors cases of fraud and misappropriations/ burglary/ dacoity  in supervised entities.
  • Complaints and Grievances : DoS monitors and follows up the complaints and grievances received against the supervised entities.