The Regulatory Environment in India
With strong growth in the financial industry in general as well as the diversified development of Fintech in recent years, India's financial industry is steadily growing. This growth can be seen at several different areas of the finance industry, including commercial banks, insurance companies, non-bank financial companies, and financial startups in India. According to the FAQ on the Cloud Adoption for Indian Banks website, which was issued by the Institute for Development and Research in Banking Technology (IDRBT), banks are permitted and even encouraged to take full advantage of the several technological innovations and computing capabilities of cloud computing. This includes its scalability, speed and agility, as well as its global footprint, focus on core competencies, as well as strong record for security and compliance. IDRBT established several centers for emerging technology, of which cloud computing is one of them. Therefore, we can foresee that the proportion of financial industries adopting emerging technologies will undoubtedly increase in the future. This will be especially true for cloud adoption. Customers will benefit from cloud adoption through the improved business continuity, resource scalability, and enhancing cyber-security of financial services running on the cloud.
The regulator Reserve Bank of India (RBI) issued several guidelines to the banks in India with the purpose of helping them manage the potential risks of outsourcing, information security and technology. At the same time, the regulator to Insurance Companies in India, Insurance Regulatory and Development Authority (IRDAI) also issued guidelines on managing outsourcing activities and relevant information security risks. Alibaba Cloud, as a world-leading Public Cloud Service Provider, is committed to complying with such regulations and requirements. Alibaba Cloud also provides some additional materials and information to help our customers understand the risks that the financial industry may encounter when they migrate to the cloud as well as their corresponding solutions.
RBI (Reserve Bank of India)
Reserve Bank of India (RBI) is the central bank of India and controls the issuance and supply of Indian currency. The Reserve Bank of India is also the regulatory body of the entire Indian bank. It provides guiding principles for various businesses and internal management of the bank. The Reserve Bank of India plays an important role in the overall development strategy of the Indian government.
- Guidelines on Managing Risks and Code of Conduct in Outsourcing of Financial Services by Banks (Guidelines on Outsourcing)
These guidelines on managing risks in Outsourcing are intended to provide direction and guidance to banks which choose to outsource financial services to adopt sound and responsive risk management practices for effective oversight, as well as due diligence and management of risks arising from such outsourcing activities.
- Guidelines on Information Security, Electronic Banking, Technology Risk Management and Cyber Frauds
These guidelines help banks to identify and manage risks under IT Governance, information security, IT operations, IT service outsourcing, IS audit, cyber frauds, business continuity planning, customer education, and legal issues.
IRDAI (Insurance Regulatory and Development Authority)
Insurance Regulatory and Development Authority (IRDAI) is an autonomous statutory body responsible for the supervision of the insurance and reinsurance industry in India, and provides relevant guidelines for those companies to ensure that the insurance industry can operate in India fairly, transparently and orderly.
- IRDAI (Outsourcing of activities by Indian Insurers) Regulations
These guidelines are to ensure that insurers follow prudent practices on management of risks arising out of outsourcing with a view to preventing negative systemic impact and to protect the interests of the policyholders and to ensure sound and responsive management practices for effective oversight and adequate due diligence with regard to outsourcing of activities by Insurers.
Alibaba Cloud provides the below resources to its customers on how Alibaba Cloud helps with the facilitation of compliance with the requirements in RBI/IRDAI guidelines.