RBI vide its notification dated on 10th April, 2023 issued to all Scheduled Commercial Banks (excluding Regional Rural Banks); Local Area Banks; Small Finance Banks; Payments Banks; Primary (Urban) Co-operative Banks; Non-Banking Financial Companies; Credit Information Companies; and All India Financial Institutions (EXIM Bank, NABARD, NaBFID, NHB and SIDBI)
The RBI issued a master direction for banks and other financial service entities to ensure effective management of attendant risks in outsourcing of IT activities.
The RBI move can be seen in the backdrop of growing instances of technical glitches and irregularities in the IT systems of banks as they outsource substantial portion of their IT activities to third parties which expose various risks.
In order to ensure effective management of attendant risks, the Statement on Developmental and Regulatory Policies dated February 10, 2022, proposed the issuance of suitable regulatory guidelines on Outsourcing of IT Services. Accordingly, a draft Master Direction on Outsourcing of IT Services was released for public comments in June 2022. Based on feedback received, the finalised Reserve Bank of India (Outsourcing of Information Technology Services) Directions, 2023 are enclosed herewith.
The Master Directions shall come into effect from 1st October, 2023.
Link of Circular: https://rbidocs.rbi.org.in/rdocs/notification/PDFs/102MDITSERVICES56B33FD530B1433187D75CB7C06C8F70.PDF
About the Author
