An Assignment

on
INTEGRATED SUPERVISION SYSTEM (ISS)

SUBMITTED TO:

MR. MD. RAZAUL KARIM

SENIOR MAINTENANCE ENGINEER & MODULE COORDINATOR
BBTA, MIRPUR-1216

SUBMITTED BY:
MD. HOSSAIN AL GAZZALI
ROLL NO:56
37TH FOUNDATION TRAINING COURSE
BBTA, MIRPUR-1216

DATE OF SUBMISSION: 17/07/2019

INTRODUCTION:

Supervision on banks and NBFIs is one of the most important tasks of Bangladesh Bank.
Nature of banking operations has changed many times in accordance with the pace of
technological innovation/up gradation. Keeping it in mind, central bank also adopts new
measures, philosophy and mechanism to combat the up‐ coming challenges lay with the
financial activities. To ensure stability and compliance environment of the financial
sector Bangladesh Bank, the central bank of Bangladesh, has taken a good number of
information and technology bases initiatives. Introducing On‐line CIB Reporting, BACH,
Core Banking Solution, On‐line EXP, IBP, IMP & Remittance Reporting system and
establishment of EDW (introduced for the first time in Bangladesh) are some success
history. As a part of this expedition BB is now going to introduce the Integrated
Supervision System.

CONTEXT:
Bangladesh Bank is aimed to establish a digitized work environment in the banking
system to alien the national philosophy of the country. Bangladesh Bank has initiated
automation at early eighty decades and then after the process gradually improving. BB
achieved a major success in automation during last seven years. Bangladesh Bank has
developed various monitoring tools to strength the supervision system as a whole.
Automated Clearing House, Enterprise Data Management and Foreign Exchange
Monitoring Dash Board were the primary success history of BB. Considering these
experiences BB has started a comprehensive supervision research in late 2012 to develop
an effective supervision and monitoring model to strengthen the existing supervision
system just after some bitter experience with financial scam took place in the banking
industries. Integrated Supervision System (ISS) is the outcome of that thought.

DEVELOPMENT HISTORY:
Primary thought generated by the honorable Governor of Bangladesh Bank.
A 07 (Seven) Member Development Committee was formed in 09th December,
2012.
Primary assessment report of the committee was approved by Governor on 25th
February, 2013.
Primary software development work finished on 31 July, 2013.
Data testing started on August, 2013.
The Software was inaugurated by honorable Governor on 8th October, 2013
Mandatory reporting of banks head office and branches stated on March, 2014.
 MAJOR CONSIDERATION OF THIS MODEL:

Ensure
financial safety
through
supervision
frame work

Establish good
governance with
ethical standard.

Define an
Active participation effective
of all level supervision tool
supervisors viz. for all level of
supervisors.

UTILITY OF ISS:
1. This monitoring tool enables BB to ensure dynamic supervision on root level
activities of banks and NBFIs.

2. Integrated Supervision System boost‐ups the existing supervision technique and

philosophy;

3. Enable BB to identify the supervision concerns and take action thereof more quickly
than ever.

4. Risk focusing supervision has been started.

5. Integrated Supervision Management Cell has already developed a Pre-inspection

Assessment

Report to point out the most important examining issues of a bank or branch.
Furthermore the
 GOALS:

To develop a micro effective macro prudential supervision

structure
To ensure the supervision effectively at all
To integrate the supervision information
level of supervision structure.

Streamline the supervision efficiency of all supervision forces including the branch management
of a bank.

To integrate the supervision information To ensure effective supervision

To adopt risk‐based supervision approach

To minimize the supervision frequency

STRATEGIC OBJECTIVES:
Effective use of resources
Enhancement of supervisors’ capacity
Ensure timely and prompt supervision surveillance.
Enlarge supervision coverage
Proper analysis of supervision concerns
Improvement of existing MIS, in Bangladesh bank, scheduled banks and NBFIs
Ensure a smooth and timely decision making process

SALIENT FEATURES OF ISS:

Data accuracy has been certified by the top management of the bank.
Ensure accountability of bank and branch management.
Data collection monthly.
Data collection dependency external (from banks, FIs HO and branch directly) and
internal form other system of Bangladesh Bank.
 Total 267 data field under 32 data segment has been incorporated in the data
collection RIT for bank’s head office and Total 235 data field under 29 data
segment has been incorporated in the data collection RIT for bank’s branch and
Total 104 data field under 13 data segment has been incorporated in the data
collection RIT for Non bank financial institute and Total 83 data field under 10
data segment has been incorporated in the data collection RIT for FI’s branch.
Borrower wise detailed credit information of all banks and branches has been
collected quarterly basis.
Graphically present the bank’s information with necessary trend analysis in
dashboard.
Focus the supervision concerns automatically.
Individual bank and bank branch wise dynamic information pages.
Highly informative dynamic Data Tables and Graphs.
Analytical option of macro and micro level supervision issues.
Data interpretation flexibility and open end developing/incorporating option.

CONCLUSION:

Supervision and monitoring process of Integrated Supervision Management Cell

Integrated Supervision Management Cell has been vested with the responsibilities to
Ensure accountability of bank and branch management.manage the “Integrated Supervision
System” of Bangladesh Bank. The cell continuously observes various dashboards and
data table of Integrated Supervision System. If there is any risk issues observed the banks
and branches are instantly called explanation and advised to mitigate the risk primarily.
These activities convey the massages to the bank management that the issues are under
observation that stop the recurring effect of risk intensification. After getting the
explanation the cell meticulously examine the cause and if any deviation found further
investigation started. Furthermore, the on-site supervision departments are also the user
of ISS. Even though the supervision departments are often requested to conduct special
inspection on the basis of risk gravity observed by ISM cell. This is mentionable here that
risk issues are categorize as high, medium, low and default as per the risk thresholds table
of Integrated Supervision System risk study paper.