RBI issued a statement on strengthening governance arrangements with respect to the risk-based internal audit framework. The statement highlights that while the RBI guidance note on risk-based internal audit lays out the basic approach for risk-based internal audit functions, banks are expected to re-orient their approach, in line with the evolving best practices, as a part of their overall governance and internal control framework. Banks are encouraged to adopt the International Internal Audit standards, like those issued by BCBS and the Institute of Internal Auditors (IIA). In a separate statement, RBI announced the opening of a Second Cohort under the Regulatory Sandbox with cross-border payments as its theme. The window for submission of applications for the Cohort shall be open from until February 15, 2021.
RBI also decided to select “micro, small, and medium enterprise (MSME) lending” as the theme for the Third Cohort, the details of which shall be announced in due course. In addition, RBI notified that a working group is being set up to study all aspects of digital lending activities in the regulated financial sector as well as by unregulated players so that an appropriate regulatory approach can be put in place. The terms of reference would require the working group to:
- Evaluate digital lending activities and assess the penetration and standards of outsourced digital lending activities in RBI regulated entities
- Identify risks posed by unregulated digital lending to financial stability, regulated entities, and consumers
- Suggest regulatory changes, if any, to promote orderly growth of digital lending
- Recommend measures, if any, for expansion of specific regulatory or statutory perimeter and suggest the role of various regulatory and government agencies
- Recommend measures for robust data governance, data privacy and data security standards for deployment of digital lending services
Keywords: Asia Pacific, India, Banking, Governance, Internal Audit, Internal Control, Regulatory Sandbox, Cross-Border Payments, Digital Lending, Credit Risk, Regtech, RBI
Previous ArticleECB Analysis Shows Privacy as Biggest Concern in Use of Digital Euro
Next ArticleCMF Consults on Implementation of IFRS 17 in Chile
The Prudential Regulation Authority (PRA) published the final policy statement PS21/21 on the leverage ratio framework in the UK. PS21/21, which sets out the final policy of both the Financial Policy Committee (FPC) and PRA
The Consumer Financial Protection Bureau (CFPB) proposed to amend Regulation B to implement changes to the Equal Credit Opportunity Act (ECOA) under Section 1071 of the Dodd-Frank Act.
The Prudential Regulation Authority (PRA) decided to maintain, at the 2019 levels, the buffer rates for the Other Systemically Important Institutions (O-SII) for another year, with no new rates to be set until December 2023.
The Financial Stability Board (FSB) published a progress report on implementation of its high-level recommendations for the regulation, supervision, and oversight of global stablecoin arrangements.
In a letter to the authorized deposit taking institutions, the Australian Prudential Regulation Authority (APRA) announced an increase in the minimum interest rate buffer it expects banks to use when assessing the serviceability of home loan applications.
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) are consulting on the preliminary guidance that clarifies that stablecoin arrangements should observe international standards for payment, clearing, and settlement systems.
The European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA) have set out their respective work priorities for 2022.
The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0, in addition to the reporting module on leverage under the common reporting (COREP) framework.
The European Commission (EC) published the Implementing Decision 2021/1753 on the equivalence of supervisory and regulatory requirements of certain third countries and territories for the purposes of the treatment of exposures, in accordance with the Capital Requirements Regulation or CRR (575/2013).
EC published the Implementing Regulation 2021/1751, which lays down implementing technical standards on uniform formats and templates for notification of determination of the impracticability of including contractual recognition of write-down and conversion powers.