Executive Summary:
This letter from the Reserve Bank of India (RBI) addresses COVID-19 operational and business continuity measures for all Scheduled Commercial Banks (excluding RRBs), Local Area Banks, Small Finance Banks, Payment Banks, UCBs, and NBFCs. It outlines steps for banks/financial institutions to take regarding the spread of the disease, business continuity, and impact assessment, given the WHO's declaration of COVID-19 as a pandemic. Immediate contingency measures are to be taken to manage risks.
Key Points / Main Content:
Business Continuity & Prevention Measures:
* Devise a strategy and monitoring mechanism for the spread of COVID-19 within the organization, including interventions for infected employees.
* Revisit the Business Continuity Plan (BCP) to ensure continuity in critical interfaces and prevent service disruption due to absenteeism.
* Share instructions and strategies with staff at all levels, sensitizing them about preventive measures and steps to take in suspected cases based on health authority guidelines.
* Encourage customers to use digital banking facilities.
Impact Assessment & Contingency:
* Assess the impact of potential COVID-19 scenarios on balance sheet, asset quality, and liquidity.
* Take immediate contingency measures to manage the risks identified.
Monitoring & Reporting:
* Constitute a Quick Response Team to monitor the situation, provide regular updates to top management, and serve as a single point of contact with regulators/outside institutions/agencies.
Impact Analysis:
Regulated Banks/Financial Institutions (All Scheduled Commercial Banks excluding RRBs, All Local Area Banks, All Small Finance Banks and All Payment Banks, All UCBs, NBFCs):
* Impact: Required to implement strategies to prevent the spread of COVID-19 within their organizations, ensure business continuity, assess the financial impact of the pandemic, and establish a Quick Response Team.
* Action Required: Devise strategies and monitoring mechanisms, revisit BCP, share information with staff, assess financial impacts, take contingency measures, and constitute a Quick Response Team.
Bank/Financial Institution Staff:
* Impact: Need to be informed about and adhere to preventive measures and strategies for dealing with potential COVID-19 cases.
* Action Required: Follow instructions and strategies provided by the organization, including preventive measures and steps to take in suspected cases.
Customers:
* Impact: Encouraged to utilize digital banking facilities.
* Action Required: Use digital banking facilities where possible.
RBI:
* Impact: Needs to be kept informed of the risk assessment and contingency measures taken by the regulated entities.
* Action Required: Receive intimation of contingency measures taken.
Key Entities Referenced
COVID19: A novel coronavirus disease that caused a global pandemic.
World Health Organization (WHO): An international organization that declared COVID-19 as a pandemic.
Scheduled Commercial Banks: Banks regulated by RBI excluding RRBs, Local Area Banks, Small Finance Banks and Payment Banks.
UCBsNBFCs: Refers to all Urban Co-operative Banks and Non-Banking Financial Companies.
Government of India: The central government of India, coordinating with state machineries to prevent and control the spread of COVID-19.
Indian financial system: The financial system of India, whose resilience needs to be protected during the COVID-19 pandemic.
Business Continuity Plan (BCP): A plan to ensure continuity in critical interfaces and prevent disruption of services during emergencies like the COVID-19 pandemic.
Ajay Kumar Choudhary: Chief General Manager at RBI.
RBI/2019-20/172
DoS.CO.PPG.BC.01/11.01.005/2019-20 March 16, 2020
The Chairman / Managing Director / Chief Executive Officer
All Scheduled Commercial Banks (Excluding RRBs)
All Local Area Banks
All Small Finance Banks and
All Payment Banks/All UCBs/NBFCs
Madam / Dear Sir,
COVID-19- Operational and Business Continuity Measures
As you are aware, the World Health Organization (WHO) has declared the recent
outbreak of the novel coronavirus disease (COVID-19) a pandemic indicating
significant and ongoing person-to-person spread in multiple countries, with the
uncertainty about the extent of spread and the likely impact on the global economy.
Several confirmed cases have also been detected in India, which highlight the need
of a co-ordinated strategy for handling the emerging situations for protecting the
resilience of the Indian financial system.
2. While the Government of India, in co-ordination with the state machineries, is
already taking steps for preventing and controlling the local transmission of disease,
further steps, including the indicative list presented below, are required to be taken by
the respective banks/financial institutions as a part of their existing operational and
business continuity plans:
(a) Devising strategy and monitoring mechanism concerning the spread of the
disease within the organisation, making 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;
पय�वे�ण िवभाग, के�ीय काया�लय, व�� ट�ेड स�टर, स�टर , कफ परेड, कोलाबा, मुंबई
टेलीफोन: 022- 2216 3395 फै�: 022-2218 0157 ईमेल - cgmicdosco@rbi.org.in
-1 – 400005
Department of Supervision, Central Office, World Trade Centre, Centre I, Cuffe Parade, Colaba, Mumbai - 400 005
-
Tel: 022-2216 3395 Fax: 022-2218 0157 e-mail: cgmicdosco@rbi.org.in
ब�क िहन्दी म� प�ाचार का स्वागत करता है।(b) Taking stock of critical processes and revisiting Business Continuity Plan (BCP) in
the emerging situations/scenarios with the aim of continuity in critical interfaces
and preventing any disruption of services, due to absenteeism either driven by the
individual cases of infections or preventive measures;
(c) Taking steps of sharing important instructions/ strategy with the staff members at
all levels, for soliciting better response and participation and sensitizing the staff
members about preventive measures/steps to be taken in suspected cases, based
on the instructions received from health authorities, from time-to-time;
(d) Encourage their customers to use digital banking facilities as far as possible.
3. Besides taking steps as above for ensuring business process resilience, supervised
entities should also assess the impact on their balance sheet, asset quality, liquidity,
etc. arising 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, etc. Based on the above studies, they should take
immediate contingency measures to manage the risks under intimation to us.
4. As the situation requires to be monitored closely, both from business and social
perspective, a Quick Response Team may be constituted 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.
Yours faithfully,
(Ajay Kumar Choudhary)
Chief General Manager