The Reserve Bank of India is working towards creating a robust data analytics ecosystem to support its supervisory functions, ensuring that its approach remains forward-looking and agile in a rapidly changing world, according to Deputy Governor Swaminathan J.
He emphasised that RBI is dedicated to establishing a global model of risk-focused supervision, one that emphasises strong risk discovery and compliance culture, and builds a “through-the-cycle” risk assessment framework.
“While the task of supervision may be challenging, it is also essential for ensuring the stability and resilience of the financial system. As supervisors, it is through our vigilance, proactive measures, and continued evolution of supervisory frameworks that we can create a financial environment where institutions not only survive but continue to thrive in the face of emerging risks,” Swaminathan said in his opening remarks at the High-level Policy Conference of Central Banks from the Global South..
Calibrated approach
The Deputy Governor said the RBI has designed and implemented a “Calibrated Supervisory Approach”, which provides the flexibility and scalability needed to focus more effectively on high-risk institutions and practices
At the heart of this approach is a proactive off-site surveillance mechanism that enables RBI to detect emerging risks and assess vulnerabilities across the supervised entities, ensuring timely action to mitigate or manage these risks before they escalate, he said.
To further strengthen its supervisory capacity, RBI is also investing in initiatives such as the College of Supervisors, which seeks to enhance the skills and expertise of its supervisory staff, Swaminathan said.
In addition to building capacity, RBI is increasingly focusing its efforts on improving the risk and compliance culture within supervised entities, ensuring that these institutions not only meet regulatory requirements but also foster a proactive, robust approach to managing risk and compliance at all levels.