Department of Supervision (DoS), Reserve Bank of India has undertaken a comprehensive exercise to consolidate existing standalone circulars issued by the Reserve Bank in supervisory domain into function-wise, entity-specific consolidated Directions for easier navigation and application by the Regulated Entities (REs).

Consolidation Approach

2. The consolidation includes all supervisory instructions administered by DoS. Thus, the universe of consolidation includes instructions issued by DoS as well as erstwhile Supervisory Departments which have since been merged into DoS either partly or fully, along with certain instructions of supervisory nature issued by the Department of Regulation.

3. The consolidation has been done on an ‘as-is’ basis, i.e., only guidelines currently in force have been considered for consolidation, without any review. These guidelines have been reviewed for the purpose of repealing those guidelines which are outdated, duplicative, or otherwise no longer relevant.

4. Retained guidelines have been systematically categorised into nine functional areas viz., (i) Compliance Function; (ii) Concurrent Audit; (iii) Cybersecurity, Technology: Risk, Resilience and Assurance; (iv) Digital Payments Security Controls; (v) Fraud Risk Management; (vi) Internal Audit Function; (vii) Statutory Audit; (viii) Supervisory Returns; and (ix) Miscellaneous.

5. The nine function-wise guidelines have been further organised into RE-wise Directions based on the applicability of the guidelines to each type of RE segment, covering 11 types of REs viz., Commercial Banks (CBs), Small Finance Banks (SFBs), Payments Banks (PBs), Local Area Banks (LABs), Regional Rural Banks (RRBs), Urban Co-operative Banks (UCBs), Rural Co-operative Banks (RCBs), All India Financial Institutions (AIFIs), Non-Banking Financial Companies (NBFCs), Asset Reconstruction Companies (ARCs), and Credit Information Companies (CICs).

6. Instructions to Statutory Auditors of NBFCs have been covered under the Directions addressed to Statutory Auditors of NBFCs.

Format of the Consolidated Directions

7. The consolidated Directions have been drafted using a continuous-flow approach, with the principal regulatory elements incorporated within the main body of the Directions. In this context, following key changes have been adopted vis-à-vis the earlier approaches:

1. Advisory elements in the circulars have been included as a part of the main text using appropriate language conveying the advisory nature of the instructions.

2. Extant Frequently Asked Questions (FAQs) which included supervisory instructions have been converted into Paragraphs of the Directions.

3. Annexures to the Directions have been limited to Formats / Forms.

4. Instructions pertaining to the responsibilities of the Board have been aggregated at a single place in each Direction.

8. The supervisory instructions have been organised into distinct Directions for each type of RE on each supervisory function. In addition, residual supervisory instructions have been consolidated in a separate Miscellaneous Direction for applicable REs.