The corner-stone of this realignment exercise was to overhaul and re-engineer governance and management in the rural co-operative credit structure with a view to preventing recurrence of such financial haemorrhaging. And, significantly, to reinforce, and sustain, overhauled and re-engineered governance in such financially rejuvenated and renewed cooperative credit structure, effective and credible supervision and regulation is a sine qua non.
As the distinguished audience is aware, while NABARD supervises the co-operative credit institutions, Reserve Bank regulates them. This supervisory and regulatory framework involves RBI framing and issuing regulatory instructions and guidelines and NABARD  2  BIS central bankers’ speeches  examining their actual compliance during inspection. Currently, these regulatory instructions and guidelines are scattered across individual circulars containing them.