Mumbai, Jan 10: The Reserve Bank of India (RBI) plans to significantly enhance real time offsite monitoring of banks, Governor Sanjay Malhotra said, aiming to improve early detection of risks and strengthen the resilience of the financial system.
Traditionally, RBI has relied on onsite inspections, including annual and targeted reviews under the CAMELS framework focusing on capital adequacy, asset quality, management, earnings, liquidity, and systems. The new approach leverages advanced offsite monitoring and surveillance (Osmos) along with data analytics to continuously track banks’ financial health through automated daily, weekly, and monthly data submissions. This enables early identification of stress in asset quality, liquidity, and capital.
Malhotra noted that offsite supervision allows faster risk detection, optimizes resources by shifting 70–75% of supervisory efforts to tech-driven analysis, ensures improved data integrity, and facilitates quicker RBI interventions, including quarterly checks for weaker banks.
Speaking at the third annual global conference of the College of Supervisors in Mumbai, Malhotra highlighted the need to make supervision more offsite and near real time rather than periodic. “Departments can build stronger analytics and supervisory dashboards to support continuous monitoring and early risk detection. SupTech and AI-enabled tools will play a critical role, while judgment and accountability remain with supervisors,” he said.
The governor also emphasized that systemic resilience is a shared responsibility between supervisors and banks, advocating a collaborative approach to regulation rather than an adversarial one. He described enforcement as part of a continuum of corrective tools, essential for maintaining long-term stability, innovation, and growth in a bank-led system supporting inclusive development.
Malhotra added that RBI’s capability to assess banks’ asset quality has improved significantly, aided by databases like CRILIC, enabling more effective and proactive supervision.