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Supervisory Process

On-site inspections

NABARD 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, NABARD 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 letters to the management of banks, State Governments, sponsor bank, etc., on the major areas of supervisory concerns that need immediate rectification and holds discussions to draw up an action plan, which is monitorable.

The Supervisory Ratings is 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. 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. It facilitates issue of early warning signals on any risk prone area that requires further action from the banks.

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

NABARD monitors cases of fraud and misappropriations/ burglary/ dacoity in supervised entities. In view of the importance attached for expeditious disposal of fraud cases in banks and in pursuance of the decision taken by the Board of Supervision (for SCBs, DCCBs, RRBs), a Centralised Fraud Monitoring Cell (CFMC) has been constituted at NABARD's Head Office to monitor fraud cases involving Rs. 10.00 lakh and above.

Complaints and Grievances

NABARD monitors and follows up the complaints and grievances received against the supervised entities.

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