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NABARD Supervision of Financial Entities
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NABARD Supervision of Financial Entities

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@LuxuriantDryad

Questions and Answers

What is the structure tier for the District Central Cooperative Bank (DCCB)?

  • Tier II (correct)
  • Not classified
  • Tier I
  • Tier III

    • Which entity is not classified as a Supervised Entity (SE) of NABARD?

  • Primary Agricultural Credit Societies (correct)
  • Regional Rural Banks
  • District Central Cooperative Banks
  • State Cooperative Agriculture and Rural Development Banks

    • NABARD conducts inspections on a voluntary basis for which of the following?

  • State Cooperative Agriculture and Rural Development Banks (correct)
  • State Cooperative Banks
  • District Cooperative Banks
  • Primary Cooperative Agriculture and Rural Development Banks

    • How many Total Cooperative Banks (including state and district banks) are mentioned?

    <p>352</p> Signup and view all the answers

    What is the total number of Regional Rural Banks (RRBs) listed?

    <p>43</p> Signup and view all the answers

    Which option represents the total number of Primary Agricultural Credit Societies (PACS)?

    <p>1,05,439</p> Signup and view all the answers

    Which of the following cooperative banks has the highest number of branches according to the structure?

    <p>Primary Agricultural Credit Societies</p> Signup and view all the answers

    What percentage of active members is indicated in the structure of PACS?

    <p>39%</p> Signup and view all the answers

    Which advantage of SuperSoft 2.0 relates to ensuring uniformity across different regions?

    <p>Ensures countrywide uniformity and comparability</p> Signup and view all the answers

    What is a primary outcome of the comprehensive coverage offered by SuperSoft 2.0?

    <p>Enables better adherence to guidelines</p> Signup and view all the answers

    Which statement best describes how SuperSoft 2.0 impacts inspection quality?

    <p>It ensures standardized and better quality inspection reports</p> Signup and view all the answers

    Which feature of SuperSoft 2.0 helps reduce misunderstandings in assessment processes?

    <p>Minimises confusion, misunderstanding, and misses</p> Signup and view all the answers

    What role does SuperSoft 2.0 play in relation to banks' regulatory compliance cases?

    <p>It encourages banks to extend dedicated attention to regulatory compliance cases</p> Signup and view all the answers

    Which of the following enhances the accuracy and detail of assessments in SuperSoft 2.0?

    <p>Ensures more detailed and accurate assessment</p> Signup and view all the answers

    Which advantage of SuperSoft 2.0 is most related to effective communication in reporting?

    <p>Minimises confusion, misunderstanding, and misses</p> Signup and view all the answers

    What is a key feature of the Financial Action Task Force (FATF) related to India's membership?

    <p>It frames the standards for Anti-Money Laundering</p> Signup and view all the answers

    How does SuperSoft 2.0 contribute to improving regulatory compliance?

    <p>By improving regulatory and supervisory compliance</p> Signup and view all the answers

    Which aspect of SuperSoft 2.0 is intended to support uniformity in inspection procedures?

    <p>Standardization of inspection report formats</p> Signup and view all the answers

    What does the acronym E-CAMELSC stand for?

    <p>Capital Adequacy, Asset Quality, Management, Earnings, Liquidity, Systems, and Compliance</p> Signup and view all the answers

    What is the primary purpose of the SuperSoft application introduced by NABARD?

    <p>To digitalize the supervisory process and minimize manual intervention</p> Signup and view all the answers

    Which entities are primarily being supervised using the SuperSoft application?

    <p>Supervised Entities, such as StCBs and DCCBs</p> Signup and view all the answers

    What is a significant feature of the upgraded Version 2.0 of the SuperSoft application?

    <p>Incorporation of additional supervisory processes</p> Signup and view all the answers

    When was the SuperSoft application first launched?

    <p>July 12, 2022</p> Signup and view all the answers

    What role does NABARD play in the oversight of the banking sectors mentioned?

    <p>It provides comprehensive training programs and conducts inspections of banks</p> Signup and view all the answers

    Which of the following best describes the function of the E-CAMELSC model?

    <p>It evaluates the overall health and compliance of Supervised Entities</p> Signup and view all the answers

    What does the acronym DCCB refer to in the context of the banking institutions discussed?

    <p>District Central Cooperative Bank</p> Signup and view all the answers

    What is one of the challenges that SuperSoft addresses in the supervisory process?

    <p>Minimizing manual intervention in statutory inspections</p> Signup and view all the answers

    What is one of the primary components of NABARD's KYC/AML enhancement plan?

    <p>Introducing dedicated examination of KYC/AML mechanisms in SEs</p> Signup and view all the answers

    Which measure is NOT included in NABARD's plans to strengthen cyber security in FY2025?

    <p>Implementation of a blockchain security framework</p> Signup and view all the answers

    What functionality will be integrated into DIGI-DAK as part of the communication monitoring system?

    <p>Filters to view pending EFD cases at ROs</p> Signup and view all the answers

    Which training initiative is planned for enhancing cyber security knowledge among inspecting officers?

    <p>Three workshops on cyber security examination</p> Signup and view all the answers

    What standardization initiative is NABARD undertaking regarding fraud monitoring?

    <p>Digitalization of quick study/portfolio inspection reports in SuperSoft</p> Signup and view all the answers

    What is the primary role of NABARD concerning the KYC/AML/CFT framework?

    <p>To implement KYC/AML/CFT directions issued by governmental authorities</p> Signup and view all the answers

    During India's second mutual evaluation by the FATF, which aspect was NOT included in the agenda of interaction?

    <p>Political influence on financial regulations</p> Signup and view all the answers

    Which entity conducts periodic evaluations to assess measures against money laundering and terrorism financing?

    <p>Financial Action Task Force</p> Signup and view all the answers

    Which of the following is NOT a type of bank supervised by NABARD?

    <p>Commercial Banks</p> Signup and view all the answers

    What is one of the key focuses of NABARD in enhancing the KYC/AML/CFT framework?

    <p>Capacity building for understanding AML/CFT obligations</p> Signup and view all the answers

    Which organization conducts regular meetings with NABARD to enhance KYC/AML/CFT compliance?

    <p>Financial Intelligence Unit–India</p> Signup and view all the answers

    What does the acronym CFT stand for in the context of NABARD's supervisory role?

    <p>Counter Financing of Terrorism</p> Signup and view all the answers

    What kind of reports does the FATF produce during its mutual evaluations?

    <p>In-depth country reports on money laundering measures</p> Signup and view all the answers

    Which of the following represents a risk that NABARD aims to mitigate?

    <p>AML/CFT risks in the financial sector</p> Signup and view all the answers

    What is the significance of NABARD's interaction with the FATF?

    <p>To enhance the KYC/AML/CFT framework compliance</p> Signup and view all the answers

    Study Notes

    NABARD Supervision of Financial Entities

    • NABARD conducts inspections of Supervised Entities (SEs), including cooperative banks and apex societies.
    • Inspections are mandatory for state and district central cooperative banks and voluntary for SCARDBs.
    • Supervised entities include:
      • 34 StCBs with 2,140 branches across 34 states/UTs.
      • 13 SCARDBs with 791 branches across 13 states.
      • 352 DCCBs having 13,756 branches across 20 states/UTs.
      • 1,05,439 PACS located in 6.5 lakh villages with around 39% active membership.
      • 43 RRBs operating 22,069 branches across 26 states and 3 UTs.

    Digitalization and SuperSoft 2.0

    • NABARD introduced the ‘SuperSoft’ application for digitalized supervisory processes on July 12, 2022.
    • SuperSoft minimizes manual intervention and enhances compliance monitoring for SEs.
    • Upgraded to SuperSoft 2.0 with optimized features for a better user experience.
    • Key advantages of SuperSoft 2.0:
      • Ensures uniformity and comparability across inspections.
      • Provides thorough coverage of inspection areas.
      • Reduces confusion and errors in reports.
      • Promotes focused attention to regulatory compliance cases.

    Financial Action Task Force (FATF) Mutual Evaluation

    • India is a FATF member, focusing on Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) standards.
    • NABARD SEs must implement KYC/AML/CFT guidelines issued by the Government of India and RBI.
    • FATF conducts mutual evaluations to assess countries' effectiveness in combating money laundering.
    • India's second mutual evaluation took place in November 2023, examining areas like size and licensing of SEs and due diligence of personnel.

    Strengthened KYC/AML/CFT Framework

    • Growing importance of KYC/AML/CFT frameworks leads NABARD to enhance interactions with regulatory bodies like FIU-IND and RBI.
    • Goals include:
      • Consolidation of inspection guidance notes and circulars.
      • Dedicated examinations of KYC/AML mechanisms for better risk assessment.
      • Standardization of fraud monitoring systems.

    Cyber Security Enhancements

    • NABARD plans to implement various measures for cyber security in FY2025:
      • Regular IT examinations of supervised entities.
      • Development of an IT examination checklist in the SuperSoft application.
      • Workshops for Chief Information Security Officers on compliance.
      • Revision of cyber security circulars with updates.
      • Implementation of advanced monitoring systems for communications with RBI.

    Monitoring and Reporting Improvements

    • NABARD aims to use DIGI-DAK to track communication turnaround times from RBI's EFD.
    • New DIGI-DAK feature will allow for viewing and tracking of pending EFD cases.
    • System-generated reminders for pending queries will promote efficiency in communication.

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    Description

    This quiz covers the supervision procedures of NABARD on various financial entities such as cooperative banks, SCARDBs, and PACS. It also delves into the digitalization efforts with the SuperSoft application, focusing on its features and impact on compliance monitoring. Test your knowledge on the roles and structure of NABARD in financial regulation.

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