Featured Product

    RBI on Internal Controls, Regulatory Sandbox and Digital Lending Rules

    January 13, 2021

    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

    Related Articles
    News

    EU Amends CRD4 and CRD5 as Part of Capital Markets Recovery Package

    EU published Directive 2021/338, which amends the Markets in Financial Instruments Directive (MiFID) II and the Capital Requirements Directives (CRD 4 and 5) to facilitate recovery from the COVID-19 crisis.

    February 26, 2021 WebPage Regulatory News
    News

    EU Committee Recommends Systemic Risk Buffer of 4.5% in Norway

    The Standing Committee of the European Free Trade Association (EFTA) recommended that a systemic risk buffer level of 4.5% for domestic exposures can be considered appropriate for addressing the identified systemic risks to the stability of the financial system in Norway.

    February 25, 2021 WebPage Regulatory News
    News

    PRA Clarifies Approach to Onshoring of Credit Risk Rules for UK Banks

    In a recent statement, PRA clarified its approach to the application of certain EU regulatory technical standards and EBA guidelines on standardized and internal ratings-based approaches to credit risk, following the end of the Brexit transition.

    February 25, 2021 WebPage Regulatory News
    News

    FSB Sets Out Work Priorities for 2021

    In a recently published letter addressed to the G20 finance ministers and central bank governors, the FSB Chair Randal K. Quarles has set out the key FSB priorities for 2021.

    February 25, 2021 WebPage Regulatory News
    News

    EU Publishes Corrigendum to Revised Capital Requirements Regulation

    EU published, in the Official Journal of the European Union, a corrigendum to the revised Capital Requirements Regulation (CRR2 or Regulation 2019/876).

    February 25, 2021 WebPage Regulatory News
    News

    ESAs Issue Statement on Application of Sustainability Disclosures Rule

    ESAs published a joint supervisory statement on the effective and consistent application and on national supervision of the regulation on sustainability-related disclosures in the financial services sector (SFDR).

    February 25, 2021 WebPage Regulatory News
    News

    EC Consults on Crisis Management and Deposit Insurance Frameworks

    EC published a public consultation on the review of crisis management and deposit insurance frameworks in EU.

    February 25, 2021 WebPage Regulatory News
    News

    HKMA Enhances Loan Guarantee Scheme to Alleviate Pressure on SMEs

    HKMA announced that enhancements will be made to the Special 100% Loan Guarantee of the SME Financing Guarantee Scheme (SFGS) and the application period will be extended to December 31, 2021.

    February 24, 2021 WebPage Regulatory News
    News

    EBA Proposes Standards for Supervisory Cooperation Under IFD

    EBA launched consultations on the regulatory and implementing technical standards on cooperation and information exchange between competent authorities involved in prudential supervision of investment firms.

    February 24, 2021 WebPage Regulatory News
    News

    BoE Addresses Banks in Scope of First Resolvability Assessment

    BoE issued a letter to the CEOs of eight major UK banks that are in scope of the first Resolvability Assessment Framework (RAF) reporting and disclosure cycle.

    February 24, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6629