The Reserve Bank of India (RBI) said that it would be bolstering its supervisory function through the use of technology, which will help improve the central banks' ability to monitor the performance of regulated entities. The RBI's decision to invest into technology for supervisory purposes comes in the wake of a series of financial accidents, scandals and bank failures over the last two years. "Recognizing that cutting-edge technology has enormous potential for preventive compliance, transaction monitoring and automated data flows, the Reserve Bank has accorded priority to adoption of RegTech," it said in its Report on Trend and Progress of Banking in India for 2019-20. The RBI will undertake a broad-based survey on RegTech adoption, based on which it will come out with broad principles to encourage adoption, it said. The use of Supervisory Technology (SupTech) and Regulatory Technology (RegTech) will help the central bank better monitor the performance of its regulated entities which includes thousands of entities like commercial banks, cooperative banks, rural regional banks, payments companies and non-bank lenders among other actors. Currently, banks and non-bank lenders as well as payment companies regulated by the RBI are supervised in two manners. The first is on-site supervision, wherein RBI officers and inspectors directly inspect the books and operations of entities and the second is off-site supervision, wherein entities are meant to file compliance reports on their financial and operational performance with the central bank. The RBI says that off-site supervision requires companies to file reports based on a pre-defined…
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