RBI guidelines regulating bank outsourcing
MUMBAI, Aug 5 (UNI) The Reserve Bank of India (RBI) said on Friday it will soon introduce rules to ensure banks’ outsourcing of business does not expose them to risk.
“Regulated companies are increasingly using outsourcing as a means of reducing costs as well as tapping into expertise that is not available internally,” RBI Governor Das said after the policy’s announcement.
“Although outsourcing a permitted activity is an operational choice for regulated companies, it exposes them to various risks.”
The RBI has issued several guidance to banks, NBFCs and real estate finance companies on risk management when outsourcing financial services.
The central bank is now aiming to harmonize all previous guidelines, adopt and integrate global best practices and allow all companies it regulates to have all the latest instructions on financial services outsourcing in one place to look.
RBI will shortly issue draft regulations on risk management and code of conduct in financial services outsourcing.
The draft rule will be publicly commented on shortly. The scope of the new directions will be expanded to include regional rural banks, local banks, financial institutions across India, credit bureaus and unscheduled payment banks.
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