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Functions of RBI -Department of
Banking Supervision (DBS)

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Functions of RBI - Department of Banking Supervision (DBS)

Functions

The Department of Banking Supervision (DBS) is entrusted with the responsibility of supervising commercial banks and financial institutions in terms of the provisions of the Banking Regulation Act. It also serves as the secretariat for the BFS. The Department has 16 Regional Offices with around 700 inspectors.

Supervisory Process

Major instruments of supervision are on-site inspection and off-site monitoring and surveillance.

Current Focus

The Basel Committee for Banking Supervision(BCBS), which sets the standards for bank supervisors globally, had, in 1997 issued 25 "Core Principles for Effective Banking Supervision". These Core Principles serve as international benchmarks for assessing supervisory regimes. The IMF conducted an assessment of India's supervisory system in 1999 as part of the Financial Stability Assessment Programme (FSAP) and found it to be largely in compliance with the Core Principles. Services of RBI supervisors are since being used by IMF in conducting similar assessments of other countries. The RBI is one of the few non G-10 supervisory agencies represented on the Core Principles Liaison Group (CPLG), which has been formed by the BCBS to promote the implementation of the Core Principles world-wide. The RBI is also a member of the Working Group on Capital of the CPLG, which provides inputs into the new Capital Accord to be released in January 2001.

In addition, the Department is also currently engaged in moving towards risk-based supervision

  • implementing consolidated supervision

  • developing macro-prudential indicators

  • introducing risk-based internal audit in banks

  • developing a supervisory approach for internet banking

  • better integration of off-site and on-site through data warehousing technology

  • training inspectors in modern supervision techniques.


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[..Page Updated on 30.11.2004..]<>[chkd-appvd -ef]