The officers will undertake onsite supervision and off-site surveillance in a computerised environment
Old is gold for the Reserve Bank of India (RBI) if one goes by its plan to engage the services of retired officers to strengthen its supervisory framework for both banking and non-banking sectors.
This move comes in the backdrop of the steps taken by the central bank to improve the effectiveness of its supervision and monitoring of supervised entities resulting in supervisory action being taken against them.
In the last one year, RBI has imposed business restrictions on a large private sector bank; stopped a prominent card payment network from on-boarding new domestic customers onto its card network; slapped monetary penalties on a host of urban co-operative banks for non-compliance with its various master directions, among others.
In view of the large-scale changes in the size, complexity, business model and risks in the operations of banks and non-banking finance companies (NBFCs), RBI is beefing up its supervisory workforce by engaging retired officers.
So, the central bank is planning to hire 26 retired officers in the supervisory examination division (SED) of DoS — 12 in NBFC SED; eight in the urban co-operative bank (UCB) SED; and six in the scheduled commercial banks (SCBs) SED. Further, three retired officers will be hired in the Information Technology (IT) Group.
The officers engaged in SED will undertake onsite supervision and off-site surveillance in a computerised environment and associated duties, including sharing of specialised skills with supervisory resources of RBI.
The officers in IT group will undertake onsite IT examination/ thematic study covering assessment of areas such as application, network and database security, resilience of IT infrastructure; analysis of cyber security/ IT incidents reported by regulated entities and follow-up action thereon, among others.
These officers will be initially engaged for two years, with provision of one-year extension based on review of performance and achievement of intended objectives, subject to a total period of five years.
The move to hire retired officers also comes in the backdrop of serving officers reportedly being reluctant to join the Unified Department of Supervision (for Banking, Non-Banking and Co-operative Bank), which was created in November 2019, due to issues around career progression.