• Regional Offices of NABARD & Training Establishments conduct sensitisation workshops on KYC (Know Your Customer) /AML (Anti-Money Laundering), Credit Monitoring Arrangement (CMA), Frauds, Investments, Internal Checks & Controls, Corporate Governance, Investment Management, Asset Liability Management (ALM) etc. for supervised entities;
• NABARD has identified 10 reporting entities to face the FATF Mutual Evaluation (ME). Inputs on National Risk Assessment Report was provided to FATF with respect to the SEs of NABARD. Regular workshops are organised for NABARD SEs on adherence to KYC/AML/CFT guidelines.
• NABARD has conducted ‘Sensitisation Workshops’ for supervised banks on various issues such as Regulatory aspects of Cyber Security and Fraud Prevention, Advanced program on Investment & Treasury Management, Risk Management for Rural Cooperative Banks (RCBs), Asset Liability Management and NPA Recovery Management, etc.
• NABARD has introduced a self-assessment tool viz., Vulnerability Index for Cyber Security (VICS) for Supervised Entities. Banks have been categorised into four levels, based on their digital depth and interconnectedness to the payment systems.
• NABARD has introduced a self-assessment tool viz., Fraud Vulnerability Index (VINFRA) for Supervised Entities to measure their adherence to fraud management guidelines as well as to sensitise them on their vulnerability to such incidents.
• Matrix of Policies (MoP) for RRBs and RCBs was introduced to ensure continuous monitoring of the status of implementation of various policies in banks. Further, the banks were also advised to review the implementation of each of the policies, initiate necessary action wherever required and update the position on half-yearly basis within the prescribed time frame.
• 'Proactive Supervision' was introduced in the year 2020 and it envisages continuous and ongoing engagement with CEOs of all Supervised Entities (SEs) of NABARD for bringing about improvement in identified parameters/deficiencies. The objective is to ensure that the Supervisor (NABARD) engages closely with the SEs on a regular basis for ascertaining the progress made on persisting defects and compliance furnished by the SEs to the observations made in the previous Inspection and any other issue causing supervisory concern.
• Inputs on National Risk Assessment Report was provided to FATF with respect to the SEs of NABARD. Regular workshops are organised for NABARD SEs on adherence to KYC/AML/CFT guidelines. Further, NABARD faced mutual evaluation assessment by FATF Team at New Delhi on 13 November 2023.
• NABARD has devised guidance note and templates on Stress testing tools for credit risk, market risk and liquidity risk as part of enhanced CAMELSC programme.
• Setup in December 2018, the CSITE cell oversees the cyber security framework's implementation of its Supervised Entities i.e., RRBs and RCBs. The cell issues circulars and guidelines on cyber security aspects and monitors cyber security compliances with respect to government and regulatory guidelines. It disseminates cyber security threat intelligence, alerts and advisories received from various entities among the SEs and undertakes root cause analysis of cyber incidents reported by SEs. The cell organized Cyber Security Workshops for SEs & ROs, totalling 18 sessions in FY 22-23 and conducted 10 IT Examinations during the same period.
• NABARD has decided to designate Senior Supervisory Managers (SSM) for large banks based on their asset size. The SSM will be the single point of contact for the identified banks and will undertake the designated responsibilities.
• Department of Supervision has developed the E-CAMELSC model with focus on risk based quantitative and qualitative control indicators for SEs, as part of the supervisory framework. With the adoption of SuperSoft in FY 2022-23 and rolling out of Enhanced CAMELSC in FY 2023-24, the supervision strategy with respect to Inspection Programme, team composition for conduct of onsite inspection, duration for conducting Inspection, submission and issue of Inspection Documents will be revised to optimise the supervisory process of NABARD.

Committees

a. Committee on Relevance, Applicability and Retention of Three Tier Short Term Cooperative Credit Structure (STCS)

Ministry of Cooperation, Government of India has constituted a committee vide letter No. R-11017/22/2021.L&M (eFTS-113601) dated 06 July 2022 for conducting a study on the above under the Chairmanship of Shri Shaji K V, Chairman, NABARD along with MD, NAFSCOB, Secretary, NCCT and Shri Satish Marathe, Director Central Board, RBI as members. CGM, NABARD is the Member Secretary of the Expert Committee. The study report is under finalisation.

b. Committee on Revision of Risk Weights and pros and cons of bringing stronger RRBs under Basel III norms

The Report has been submitted to GoI in February 2023.

Ministry of Finance, Government of India has constituted a committee vide Letter No. 7/11/2022-RRB dated 30 September 2022 on the above under the chairmanship Shri Shaji K V, Chairman, NABARD and 07 other members. CGM, NABARD is the convenor of the Committee.

The terms of Reference of the said Committee are:

• To examine the matter of revision in risk weights on the loans granted by RRBs.
• To review the pros and cons of bringing stronger RRBs under BASEL III norms.

The Report has been submitted to GoI in February 2023.

3. Latest Updates

• Inspection of Banks: During FY 2022-23, NABARD has conducted 303 statutory and 09 voluntary inspections viz. 43 RRBs, 34 StCBs, 226 DCCBs and 09 SCARDBs based on the financial data as on 31 March 2022.
• Similarly, during 2023-24, NABARD has planned statutory inspections of 352 Supervised Entities (SEs) viz. 43 RRBs, 34 StCBs, 266 DCCBs (including TAICO) and 09 SCARDBs with reference to their financial position as on 31 March 2023.