These directions shall not be applicable to:

• Local Area Banks
• NBFC – Core Investment Companies

Regulated Entities are required to establish a robust IT Governance Framework, including governance structure and processes essential to achieve the entity’s business/strategic objectives. This framework should define the roles (including authority) and responsibilities of the Board of Directors (Board), Board level Committee, Local Management Committee (in the case of foreign banks operating as branches in India), and Senior Management. It must encompass adequate oversight mechanisms to ensure accountability and mitigate business risks.

RBI’s Updated Master Direction: Navigating the Digital Landscape Safely

In response to the dynamic shifts in the financial sector, the Reserve Bank of India (RBI) has recently launched an updated Master Direction, reflecting the profound changes brought about by digital technologies. This article delves into the key drivers behind this strategic move and explores the thematic objectives set by the RBI to strengthen IT governance, risk management, and resilience in the banking sector.
Technology becoming central to Banking & Lending services: high dependence, 24X7 operations, increasing customer expectations

• Shift in Operating Models of Banks: The last decade has witnessed a monumental transformation in the financial sector, propelled by the advent of digital technologies. The surge in online services, coupled with competitive pressures and the need for operational efficiency, has paved the way for innovations in Mobility, AIML, APIs, and Cloud Computing. These technological integrations aim to enhance service delivery, elevate customer engagement, and fortify risk management strategies.
• Rise of Banks-FinTech’s Partnership: Collaborations between traditional financial institutions and FinTech firms have become increasingly prevalent, ushering in a new era of opportunities and challenges. While these partnerships offer benefits, they also introduce complexities in managing IT systems, encompassing aspects such as data security, system integrations, interdependencies, regulatory compliance, vendor management, and shared responsibilities.
• Increasing impetus on Digital Transformation: The digital transformation wave underscores the importance of agile technologies, scalability, adaptability, and resilience across the financial spectrum. The ability to navigate these facets effectively is crucial for staying competitive and meeting evolving customer expectations.
• Continued Cyber Threats: With increased reliance on digital technologies comes an expanded attack surface for cyber threats. This has led to a surge in cybercrimes, including DDoS attacks, phishing attempts, data breaches, and ransomware attacks. Safeguarding against these threats is imperative for maintaining the integrity of financial systems.
• Regulatory Monitoring: The introduction of stringent regulations, such as the Digital Personal Data Protection Act, has heightened the need for financial institutions to ensure the security and compliance of their IT systems. This regulatory scrutiny has prompted the RBI to release updated guidelines, reinforcing the importance of robust IT governance and risk management.
• Thematic Objectives of the New RBI Master Directions:
  Elevating the Role of the Board and Top Management: The RBI emphasizes the establishment of a Board-level IT strategy committee and an IT steering committee, underscoring the pivotal role of top management in mitigating IT risks.
• Improving Delivery Capabilities and Excellence: Encouraging best practices in software development, project management, and IT service management to enhance speed, efficiency, and quality in IT service delivery.
• Sustaining the Technology Landscape: Prioritizing regular technology updates, ongoing maintenance, and robust disaster recovery plans to ensure operational efficiency, system security, and business resilience.
• Fortifying Risk Management: Mandating regular IT risk reviews and comprehensive risk management frameworks, addressing infrastructure, security, cyber threats, and third party risks.
• Boosting Security and Resilience: Enforcing strict security controls, data encryption, regular cyber drills, and enhanced disaster recovery arrangements to fortify the overall security and resilience of IT systems.
• Enhancing Monitoring & Supervision: Calling for continuous auditing, regular vulnerability assessments, enhanced reporting on critical systems, and meticulous vendor risk management to bolster monitoring and supervision.
  
  Navigating the Digital Era: Unveiling the RBI’s Master Direction on IT Governance and Risk Management
  The Reserve Bank of India’s (RBI) updated Master Direction covers an extensive array of topics surrounding IT governance, risk, controls, and assurance practices. Here, we present an insightful analysis of the pivotal highlights spanning Chapters 2 to 6, shedding light on the comprehensive framework designed to  steer financial institutions through the evolving digital landscape