Departments

Inspection Department (ID)

With a view to putting in place a comprehensive internal inspection system with a focus on adherence to the guidelines on various business, promotional, developmental and supervisory activities of the Bank, Inspection Department (ID) of NABARD was established in October 1999.

Organisation of Department

The Inspection Department is headed by a Chief General Manager who reports to the Executive Director. The Chief General Manager is assisted by General Manager, Deputy General Managers and other officers and staff in the Department.

Objectives

The major objectives of the Inspection Department are as under :

i. To provide quick and direct feed-back to the Top Management on performance of the Regional Offices (ROs), Training Establishments (TEs) and Head Office Departments (HODs) by carrying out a critical appraisal of the working and performance of the constituent units.

ii. To examine the efficacy of the existing systems and procedures and adherence thereto by the constituent units and to provide feed-back and early warning signals for bringing about policy changes so as to pave the way for effective compliance with the systems and procedures.

iii. To critically analyse staff deployment in ROs/TEs/HODs.

iv. To provide secretarial support to the two sub-committees constituted by the Board of Directors of NABARD viz., the Audit Committee of the Board (ACB) and the Risk Management Committee of the Board (RMCB) for the smooth and effective discharge of their designated functions.

Functions

The main function of the ID is to critically examine and appraise the functioning of the ROs/ TEs / HODs, vis-à-vis their objectives/goals and expected role. The role of ID, however, remains dynamic and in tune with the environmental changes and emerging organisational needs. ID's Inspection, accordingly, covers all areas of NABARD's functioning, i.e.,

Business Operations, Institutional Development, Supervision, Other Developmental and Promotional activities, Human Resource Management, Housekeeping, Finance and Accounting, etc.

Further, ID monitors defaults to NABARD in repayment of Refinance/ Loans by Banks/ State Governments, etc.

ID also monitors the work of the Concurrent Audit Cells in Regional Offices/ Training Establishments, etc.

Coverage and periodicity of inspection

At present there are 30 ROs and 5 TEs of NABARD, which are subjected to internal inspection as per the periodicity decided by ACB. Usually, the major ROs accounting for 80% of the business are inspected every year. Other ROs/ TEs are inspected once in two years. In addition to conducting the inspection of ROs and TEs, ID also conducts inspection of HO Departments.

Day to day operations of the Department

i. The Chief General Manager oversees the day-to-day functioning of the Department, finalises the schedule for conduct of inspections, decides closure of compliance or otherwise the inspection findings, etc.

ii. Drafting and Submission of Inspection Reports/ Special Notes

a) The major findings of the inspection are discussed in a wrap-up meeting with concerned in-charge of RO/ TE at the end of the inspection.

b) An Executive Summary on major observations is submitted to the Top Management on return to headquarters.

c) In case the inspection team comes across any serious irregularity, including financial irregularity or complaint, the Principal Inspecting Officer submits a Special Note.

Submission of Compliance

On receipt of the inspection report, ROs / TEs initiate necessary action for rectification of defects and implementation of suggestions pointed out/made therein. The compliance to the inspection is furnished by the RO/ TE/ HO Dept. within a period of 30 days

Concurrent Audit at Head Office

The Inspection Department has entered into an Agreement with an external Audit firm for conducting concurrent audit of select HO Departments such as Human Resources Management Department, Finance Department, Accounts Department, Investment Credit Department and Department of Protocol, Security & Premises. The Agreement contains terms covering areas to be audited, remuneration to be paid, periodicity, etc.

Access to Committees / Board's Meetings

The Department acts as the Secretariat for two Committees viz., Audit Committee of the Board (ACB) and the Risk Management Committee of the Board (RMCB). The Risk Management Committee of the Board is headed by Chairman, NABARD. These Committees include select members of the Board representing Government of India, RBI and State Government. CGM, Inspection Department is the Secretary to ACB and RMCB.

a) Major functions/ role of of the Audit Committee of the Board (ACB)

The major functions of the ACB includes:

i. To oversee the operationalisation and quality control of internal audit and inspection within the institution.

ii. Follow-up of findings of the statutory/external audit and RBI inspections.

iii. To follow-up issues raised in the Statutory Auditor’s report and interact, if required, with the external auditors before the finalisation of the Annual Financial Accounts and Report.

iv. Other related issues.

b) Major functions/ role of Risk Management Committee of the Board (RMCB)

(i) The Risk Management Committee of the Board was constituted in March 2005. The review of all perceived risks is periodically put up to the Risk Management Committee which critically evaluates the same and provides operational and policy guidance to the Bank so as to safeguard the interest of the Organisation.

(ii) The policy and strategy for Integrated Risk Management including various risk exposures such as credit risk, market risk, operational risk, etc. are part of the RMCB agenda notes.

(iii) In addition, RMCB also reviews the position of defaults to NABARD.

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