METHOD AND SYSTEM FOR HEALTH MONITORING AND FAULT SIGNATURE IDENTIFICATION

System and method for health monitoring and fault signature identification of a system are disclosed. In an embodiment, the system, estimates Health Index (HI) of the system as time series data. By analyzing data corresponding to the estimated HI, the system identifies one or more time windows in which majority of the estimated HI values are low as a low HI window, and one or more time windows in which majority of the estimated HI values are high as a high HI window. Upon identifying a low HI window, which indicates an abnormal behavior of the system being monitored, the system, based on a local Bayesian Network generated for the system being monitored, generates an Explainability Index (EI) for each sensor, wherein the EI quantifies contribution of the sensor to the low HI. Further, associated component(s) is identified as contributing to the abnormal/faulty behavior of the system.