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RBI to put in place a “PRISM” to strengthen compliance by lenders

  • Category
    Economy
  • Published
    25th Aug, 2021

Context

The Reserve Bank of India is putting in place a Platform for Regulated Entities for Integrated Supervision and Monitoring (PRISM) to strengthen compliance by supervised entities (SEs).

About

About PRISM

  • PRISM is a web-based end-to-end workflow automation system.
  • The focus of its new approach to ‘continuous supervision’ is on early identification of risks and conduct of supervisory actions.
  • This is aimed at helping supervised entities to strengthen their internal defences and resilience.
  • The focus of its new approach is to bring focus on ‘root cause analysis (RCA)’.
  • PRISM will have various functionalities with:
    • Built-in remediation workflows
    • Time tracking
    • Notifications and alerts
    • Management information system (MIS) reports and dashboards

Entities in India regulated by RBI

  • RBI regulates and supervises various entities in India. 
  • Entities regulated by the RBI include- 
  • Banks
  • All India Financial Institutions
  • Non-Banking Financial Company (NBFC)
  • All payment system providers

RBI’s annual report (2020-21) on supervisory framework

  • In its latest annual report (2020-21), RBI said it has been working towards strengthening the supervisory framework for both banking and non-banking sectors.
  • During the year, initiatives were taken towards:
    • integration of supervisory functions meant for 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)
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