The Reserve Bank of India (RBI) has introduced a web-based and end-to-end workflow automation system named ‘Platform for Regulated Entities for Integrated Supervision and Monitoring’ (PRISM) to strengthen the compliance of the entities that are supervised by RBI.
- Objective: To make continuous supervision of entities for – earlier identification of risks; conduct of supervisory actions; and strengthen their internal resilience.
- RBI supervises entities including banks, NBFCs, financial institutions and Payment System Providers.
i.The PRISM has various functionalities such as inspection, compliance, incident functionality for cyber security, complaints, and returns functionalities along with built-in remediation workflows, time tracking, notifications and alerts, management information system (MIS) reports and dashboards.
ii.Background: In its latest annual report (2020-21) in May 2021, RBI stated about its further work towards strengthening the supervisory framework for both banking and non-banking sectors.
iii.RBI has included Root Cause Analysis (RCA) in the current supervisory cycle. RCA includes a detailed assessment of governance, oversight and assurance function, business strategy and risk and compliance culture.
iv.RBI has taken various initiatives towards
- Integration of supervisory functions of different supervised entities.
- Specialisation and reinforcement of supervision through both vertical and horizontal risk assessments.
- Setting up a dedicated College of Supervisors for capacity development.
- Harnessing SupTech (supervisory technology).
Enhancement of Supervision by DOS:
i.RBI’s Department of Supervision (DoS) intends to strengthen the on-site assessment of oversight and assurance functions including risk and compliance culture in FY22.
ii.DoS also plans to include innovative and scalable SupTech to improve the efficiency and efficacy of supervisory processes.
iii.It targets to streamline the process of data collection from all the banks and their off-site assessment and on-site supervision based on KYC (Know Your Customer)/AML (Anti-Money Laundering) supervision.
iv.It is seeking to enhance the Fraud Risk Management System, including improving the efficacy of Early Warning Signal (EWS) framework.
v.It plans to introduce a dedicated market intelligence (MI) unit for frauds and implementation of automated unique system generated numbers for each fraud.
Recent Related News:
In July 2021, RBI modified the rules on applicable interest on unclaimed term deposits (TDs) after maturity in all commercial banks, small finance banks, local area banks, and cooperative banks.
About Reserve Bank of India (RBI):
Establishment – 1st April 1935
Headquarters – Mumbai, Maharashtra
Governor – Shaktikanta Das
Deputy Governors – Mahesh Kumar Jain, Michael Debabrata Patra, and M Rajeshwar Rao, T. Rabi Sankar