NABARD - National Bank For Agriculture And Rural Development

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Inspection of Banks: During 2019-20, NABARD conducted statutory inspections of 338 banks (32 StCBs, 253 DCCBs (including TAICO Bank) and 45 RRBs and voluntary inspections of 8 SCARDBs with reference to their financial position as on 31 March 2019.
Cyber Security in Supervised Entities: NABARD had, in consultation with RBI, issued circulars on ‘Cyber Security Framework in Banks’ to RRBs & RCBs on 16 March 2018. This circular mandates that banks put in place a cyber security policy, obtain approval of the Board for the same, undertake an assessment of gaps in preparedness and initiate measures for setting up Cyber Security Operations Centre (CSOC). Simultaneously, a Cyber Security and Information Technology Examination (CSITE) Cell has been set up in NABARD to monitor and guide the RRBs, StCBs, and DCCBs in the implementation of cyber security policy. CSITE Cell will also takes up examination of banks (on-site) and issue alerts and advisories.
Prompt Corrective Action for RRBs: In order to ensure financial soundness and functional efficiency of RRBs with statutory and regulatory compliance, NABARD, in consultation with RBI, issued circulars on Supervisory Action Framework for Prompt Corrective Action (PCA)i.e. self-corrective action by RRBs and supervisory action by NABARD.
Development of Indices: A Fraud Vulnerability Index (VINFRA) has been prepared to enable banks to undertake self-assessment themselves on their vulnerability to Frauds. Further, a Vulnerability Index on Cyber Security (VICS) designed to help the banks to assess their preparedness in implementation of base level cyber security controls has also been prepared for the benefit of NABARD Supervised Entities. These indicative indices which will help banks to deconstruct some important guidelines and instructions into usable bits of information.
Risk Based Supervision (RBS): A Working Group (WG) on Risk Based Supervision (RBS) was constituted in September 2019 for preparing a road map for implementation of Risk Based Supervision in our Supervised Entities, under the Chairmanship of Shri Amalorpavanathan, Ex DMD. The Report was submitted on 17 March 2020. As per recommendations of the WG, a differentiated approach will be adopted in implementation of RBS in RRBs and Rural Cooperative Banks, keeping in view their business size, regional complexities etc. The process of RBS roll out will be gradual.
Report of the Working Group on Risk Based Supervision
RRBs Amortization of Pension Liability: The RRBs have been permitted to amortize their total pension liability over a period of 5 years as advised vide NB Circular No.2533 dated 12 December 2019.

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