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ARTICLE · 16 JANUARY 2023

Draft Master Direction On Outsourcing Of IT Services

NovoJuris Legal
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Regulated Entities have been extensively leveraging Information Technology and IT enabled services to support their business models and products and services offered to their customers.

IndiaMedia, Telecoms, IT, Entertainment
NovoJuris Legal
NovoJuris Legal
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Regulated Entities (REs) (as defined below) have been extensively leveraging Information Technology (IT) and IT enabled services (ITeS) to support their business models and products and services offered to their customers. REs also outsource substantial portion of their IT activities to third parties. Such reliance on IT/ ITeS provided by third parties expose the REs to significant risks.

To address such risks, RBI has issued Draft Directions namely - The Reserve Bank of India (Outsourcing of IT Services) Directions, 2022 ("Directions"). It is pertinent to mention that these Directions are still in Draft stage and have not become effective as of date. Due to the long held stance of RBI for enacting these Directions and the possible implications on entities, it is imperative to have an understanding of the impact that these Directions may bring in.

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