The Reserve Bank of India has issued guidance on Operational Risk Management and Operational Resilience, aligning with the Basel Committee on Banking Supervision.
The guidance covers various entities, including non-banking finance companies and cooperative banks.
It introduces a three lines of defence model, emphasizing the importance of robust risk management. RBI highlighted that operational disruptions, stemming from various sources like IT threats, frauds, or natural disasters, can impact financial stability.
The note underscores the need for comprehensive risk assessment and mitigation strategies, particularly in light of the financial sector’s increasing reliance on third-party providers, accentuated by the Covid-19 pandemic.