BOM Issues Guides on Use of Cloud Services and Cross-Border Exposure
The Bank of Mauritius (BOM) published guidelines on the use of cloud services and revised an existing guideline on cross-border exposure for banks.
The guideline on use of cloud services is relevant for financial institutions engaged in the use of cloud services and can help these institutions to duly identify and manage the associated risks. The guideline sets out general requirements for the use of cloud services and the additional minimum requirements for use of material cloud services and for cloud services that involve customer information. The guideline expects financial institutions to follow a risk-based approach commensurate with the materiality of the services, including the level of governance, the risk assessment, the information security requirements, the types of controls to be deployed, the contingency plans and exit strategies, and the level of the initial and ongoing due diligence and assurance. The guideline stipulates that financial institutions shall have a phased and prudent deployment for material cloud services. Financial institutions should comply with all the requirements of this guideline and implement additional controls in light of the latest international standards and best practices for material cloud services. This guideline shall come into effect on September 07, 2022 and will be applicable to all cloud-based arrangements entered by any financial institution licensed by BOM under the Banking Act 2004 and the National Payment Systems Act 2018.
The revised guideline on cross-border exposure provides a risk-based management framework to mitigate the key cross-border banking risks. BOM has issued several guidelines in respect of the identification, measurement, management, and mitigation of credit risk. These include the guideline on country risk management, the guideline on credit risk management, and the guideline on credit concentration risk. The guideline on cross-border exposure supplements these existing guidelines and provides a set of additional minimum standards that would need to be followed by banks in respect of their cross-border exposure. With respect to regulatory reporting, the guideline specifies that a bank shall immediately inform BOM when the bank is affected by a material increase in underlying risks such as credit, legal, or reputational risks in connection with its cross-border exposure or is approached by foreign authorities regarding such matters. BOM stipulates that banks shall fully implement the requirements of this guideline within three months from its effective date. The revised guideline shall come into effect on August 22, 2022 and will be applicable to all banks licensed under the Banking Act 2004.
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Keywords: Middle East and Africa, Mauritius, Banking, Regtech, Cross Border Exposures, Credit Risk, Cloud Service Providers, Cloud Computing, BOM
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