In a latest judgment, the RBI has decided that banks which would be outsourcing their business would have to follow a comprehensive set of rules. The RBI has already notified the banks with regards to the guidelines on outsourcing.
RBI is worried that banks have been undertaking a number of outsourcing activities and this has put them to a lot of risk. Though boards of the respective banks would have a say in selection of service provider but RBI would command powers for inspecting the records of the service provider.
As per the new rules, service providers would be required to maintain customer confidentiality even after termination of the contract with the bank.
