Master Direction on Outsourcing of Information Technology Services
The Reserve Bank of India has issued directions for regulated entities on outsourcing of information technology services. The directions aim to ensure that regulated entities manage outsourcing risks effectively and maintain confidentiality, integrity, and availability of data.
Key Provisions:
The directions cover various aspects of outsourcing, including:
– Governance framework: Regulated entities must have a robust governance framework to oversee outsourcing activities.
– Evaluation and engagement of service providers: Regulated entities must evaluate and select service providers based on their ability to meet the required standards.
– Outsourcing agreement: The agreement must clearly outline the roles and responsibilities of both parties, including data ownership and confidentiality.
– Risk management: Regulated entities must identify and mitigate risks associated with outsourcing, including data breaches and business disruptions.
– Monitoring and control: Regulated entities must continuously monitor and control outsourced activities to ensure compliance with regulatory requirements.
– Cross-border outsourcing: Regulated entities must ensure that cross-border outsourcing complies with relevant laws and regulations.
– Exit strategy: Regulated entities must have an exit strategy in place to manage the termination of outsourcing agreements.
The directions also provide guidelines for specific scenarios, such as outsourcing within a group/conglomerate and the use of cloud computing services.
Chat with the Master Direction:
Download: Master Direction on Outsourcing of Information Technology Services