On Apr. 30, IND RBI issued guidance on operational risk management.
IND RBI issued Guidance note on operational risk management and operational resilience, adopting the global best practices including those on operational resilience.
Repeals the Guidance note on management of operational risk dated Oct. 14, 2005.
Updates previous guidelines based on the Basel Committee on Banking Supervision principles from Mar. 2021, focusing on enhanced operational resilience, see #83548.
Guidance Note
Addresses operational risks inherent in banking, financial systems, processes, services.
Outlines impact of operational disruptions on financial stability, arising from various causes including technological failures, fraud, geopolitical conflicts, natural disasters.
FIs need to assess, mitigate operational risks comprehensively, considering the entire spectrum of risks, using appropriate tools and controls to ensure operational resilience.
Highlights challenges which emphasized need for robust operational risk management, operational resilience due to increased dependence on virtual and remote operations.
Discusses strategies for controlling and mitigating operational risks, emphasizing the design and implementation of effective internal controls and risk mitigation measures.
Includes information on establishment of control environments that support risk identification, assessment, monitoring, compliance with regulatory requirements.
Discusses use of insurance, other risk transfer tools to manage risks; risk transfer tools should complement rather than a replace internal operational risk controls.
Advises that regulated entities regularly review and update their risk management frameworks, practices to adapt to new threats, changes in the operational landscape.
Recommends continuous improvement and adaptation to enhance the resilience.
Regulators
IND RBI
Entity Types
Bank
Reference
PR, Nt RBI/2024-25/31, DOR.ORG.REC.21/14.10.001/2024-254/30/2024, 4/30/2024;
