Reserve Bank of India issues directives on IT outsourcing
The Reserve Bank of India (RBI) released a draft of its risk management framework for outsourcing IT services.
The Master Direction draft includes regulations on managing related concentration risk, periodic risk assessments, and outsourcing IT services to foreign service providers.
The new regulations come as regulators worldwide focus on strengthening operational resilience in the financial sector.
Responding to RBI’s IT outsourcing directives, Wayne Scott, Regulatory Compliance Solutions Lead at UK-based IT firm NCC Group, said, “The risks facing financial services are ever-evolving, and this requires sound risk management to ensure business continuity.”
“The RBI has been at the forefront of operational resilience, promoting escrow solutions as one of the solutions for ensuring the ongoing provision of important business services,” he added.
NCC also offered observations on the draft, particularly around the importance of continuing to recognize software escrow solutions as part of a comprehensive business continuity plan
Further, the tech company added that RBI’s final draft of its Master Direction will be essential to ensure that its ‘Resilience by Design’ approach is reflected in guidelines to financial services firms.”
