RBI, vide circular dated April 30, 2024, has issued a
Guidance Note on Operational Risk Management and Operational
Resilience (“Guidance Note”), focusing
on operational resilience as an outcome of operational risk
management. The Guidance Note is applicable to all commercial
banks, non-banking financial companies
(“NBFCs”), co-operative banks, and all
India financial institutions. With the issuance of this Guidance
Note the Guidance Note on Management of Operational Risk dated
October 14, 2005, stands repealed. Through this Guidance Note, the
RBI intends to:
- bring in place a 3 (three) line defence model for the REs,
where business unit will form the first line of defence, followed
by organizational operational risk management function (including
compliance function) and audit function forms the third line of
defence;