RBI proposes norms for outsourcing of IT services by banks, NBFCs

The Reserve Bank on Thursday proposed norms for the outsourcing of IT services to ring-fence banks and other regulated entities from financial, operational and reputational risks.

Regulated entities (REs) will not require prior approval from the central bank for the outsourcing of IT and IT-enabled services, according to RBI’s draft Master Direction on Outsourcing of Information Technology (IT) Services.

“The underlying principle of these Directions is that the RE should ensure that outsourcing arrangements neither diminish its ability to fulfil its obligations to customers nor impede effective supervision by the supervising authority,” said the draft, on which the RBI has invited comments from stakeholders by July 22.