RBI released new norms on outsourcing of IT services.

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The Reserve Bank of India (RBI) on Thursday proposed related norms for outsourcing of IT services by banks and other regulated entities.

These parameters are intended to manage financial, operational and credit related risks.

As per RBI's draft on outsourcing of information technology (IT) services, outsourcing of IT and IT-enabled services to regulated entities (REs) will not require prior approval from the central bank.

The central bank said that while regular entities largely use IT and IT-enabled services to support their business models, they rely on third parties for a large part of their work, so they are exposed to risks. are in danger of becoming a victim.

"The underlying principle of these directives is that the RE should ensure that the outsourcing arrangement does not reduce its ability to meet its obligations to customers and does not impede effective oversight by the supervising authority," the draft said. .''

RBI has sought suggestions from stakeholders on this draft by July 22. 

Banks, payment banks, co-operative banks, credit information companies, NBFCs and other regulated entities have to implement a widely approved IT outsourcing policy.

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Another news for banking and non-banking entities

The RBI this week extended by three months the deadline for credit and debit card issuers and non-banking finance companies to comply with certain norms such as activating the cards without the consent of the customers.

Banks and NBFCs were to implement RBI's Master Direction on 'Credit Cards and Debit Cards - Issuance and Operating Instructions, 2022' from July 1.

Keeping in view the representations received from the banking industry, RBI said in a circular that it has been decided to extend the deadline for implementation of certain provisions of this Master Direction till October 1, 2022.

The provisions in compliance with which the moratorium has been granted include provisions relating to activation of credit cards.

As per the Master Direction, if the card has not been activated even after 30 days of issuance, the issuing institution will have to obtain One Time Password (OTP) based consent from the cardholder to activate the credit card.

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If the Customer does not consent to activate the Card, the Card Issuer should close the Credit Card Account at no cost to the Customer within seven working days from the date of receipt of confirmation from the Customer.

Further, the card issuers have also been asked to ensure that the credit limit sanctioned and advised to the cardholder is not breached at any point of time without obtaining explicit consent from the cardholder.

In this case also time has been given till October 1.

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