<h1>Risk Based Supervision: phased shift to entity focused, forward looking oversight requiring stronger MIS, governance and audit coordination.</h1> Implementation of a Risk Based Supervision framework will be phased for select banks, shifting supervision from uniform compliance testing to entity specific, forward looking assessment of risk. The approach requires robust bank risk management, reliable MIS/data warehouses, internal models linking capital to risk, risk based pricing and transfer pricing, effective internal controls and risk focused internal audit, plus strengthened audit committee oversight. Success also depends on supervisory capacity building, clear demarcation between regulation and supervision, Board and Top Management commitment, and coordinated engagement between supervisors and external auditors.