The RBI conducts both on-site inspections of banks as well as technologydriven off-site surveillance of banks to ensure compliance with the prescribed guidelines. In addition, the RBI relies on accountants to ensure compliance with financial reporting requirements. In the course of monitoring compliance with the prudential regulations, the RBI identifies and requires corrections for departures from established accounting standards.
It also pursues the auditors’ qualified opinion with the banks and their auditors. This serves to provide the RBI with valuable insights on the inhibitors of performance, which can be utilised to advise banks on corrective measures.