RBI launches new IT outsourcing guidelines

MUMBAI, INDIA — The Reserve Bank of India (RBI) recently released new guidelines for outsourcing IT services by banks and non-banks in the country.
According to RBI, these new regulations will protect regulated entities from reputational risks arising from such arrangements.
The final guidelines, which would take effect from October 1, 2023, state that any outsourcing arrangements must uphold the responsibilities and obligations that banks and non-banks have to their customers.
The RBI also directed all regulated entities to ensure that the service provider employs the same high standards of care. Banks and non-banks must also evaluate the need for outsourcing IT services based on a comprehensive assessment of attendant benefits and risks.
Lastly, regulated entities are also advised to refrain from engaging with IT service providers that could compromise or weaken their reputation.
RBI’s new IT outsourcing guidelines are expected to strengthen the industry in India, which is a key provider of IT services worldwide.