October 08, 2013

Aptivaa was present as the knowledge partner of the conference on “Risk Based Supervision” organized by Fintelekt in Mumbai on the 8th of October, 2013. The objective of the conference was to address key aspects of the new supervision approach being implemented by the Reserve Bank of India (RBI). The conference was attended by representatives of several Indian Banks, senior RBI officials and leading industry practitioners.

Aptivaa administered a survey on the participants to explore the key drivers, challenges and preparedness of Banks to migrate to RBS. The respondents of the survey belong to Banks that control around 60% of the Indian Banking system and form a representative sample of the industry in terms of ownership (public sector, private sector and foreign owned) and size (large, medium and small).

The survey highlighted several hurdles and concerns which need to be addressed in order to ensure a smooth transition to the new supervision approach. While a large number of banks have conducted a preliminary gap analysis of their preparedness for RBS, independent third party validation of the gaps has been conducted in very few cases. A majority of the banks are yet to set up cross-functional teams to manage the RBS initiative and fill-up the identified gaps. A centralized data warehouse has not been established for most of the banks, and hence data availability is a key concern. A majority of the banks also expressed the need to improve the understandings and skills of their staff.

The survey also underlined the view of the banks towards the implementation of the new approach. Most banks are looking at it as a key strategic project and the senior management and board of directors are actively involved. The banks also believe that RBS will impact almost all facets of Banking including Business and Strategy, Capital Management, Risk Management, Internal Audit and Risk IT Infrastructure.