Covid-19 Threat: Devise Strategy And Monitoring Mechanism: RBI To Banks, NBFCs

Money & Banking
Our Bureau

Mumbai | Updated on

March 16, 2020

Published on

March 16, 2020

 

 

The Reserve Bank of India (RBI) has issued an advisory asking banks and non-banking finance companies (NBFCs) to devise a strategy and monitoring mechanism concerning the spread of novel coronavirus disease (Covid-19) within the organisation, take stock of critical processes and revisit their business continuity plan in the emerging situations/scenarios, and encourage customers to use digital banking facilities as far as possible.

It also wants the supervised entities to assess the impact on their balance sheet, asset quality and liquidityarising out of potential scenarios such as further spread of Covid-19 in India and its effect on the economy, contagion from wider disruption in the global economy, and the global financial system.Based on these studies, they should take immediate contingency measures to manage the risks and inform the RBI.

As the situation requires to be monitored closely, both from a business and social perspective, banks and NBFCs may constitute a quick response team for the purpose, which shall provide regular updates to the top management on significant developments, and act as a single point of contact with regulators/outside institutions/agencies.

The RBI said banks and NBFCs should make timely interventions for preventing further spread in case of detection of infected employees, including travel plans and quarantine requirements, as well as avoiding spread of panic among staff and members of the public.

To ensure continuity in critical interfaces and prevent any disruption of services due to absenteeism either driven by the individual cases of infections or preventive measures, the central bank wants the supervised entities to take stock of critical processes and revisit their business continuity plan in the emerging situations/scenarios.

Banks and NBFCs must take steps to share important instructions/ strategy with the staff members at all levels for soliciting better response and participation and sensitising staff members about preventive measures/steps to be taken in suspected cases.

Published on March 16, 2020

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