on-site inspection, off-site surveillance, market intelligence and reports of Statutory Auditors (SAs), a fifth pillar of supervision in the form of periodic interaction with all the stakeholders – including statutory auditors, credit rating agencies, credit information companies, mutual funds and banks having large exposures to NBFCs – has been instituted to have a clearer understanding of the emerging risks and developments in the sector so that critical information is available, whenever required.
27. As regards the co-operative banking segment, we have developed a robust stress-testing framework for urban cooperative banks (UCBs). It also acts as an early warning system for cooperative banks with the purpose of timely identification of weak banks for appropriate action. This is a shift from reactive to pro-active supervisory approach, intended to ensure surveillance of vulnerabilities in UCBs on an ongoing basis.