What changed
RBI has issued directions to manage risks in outsourcing for Urban Co-operative Banks, with specific provisions for IT outsourcing applicable to Tier-3 and Tier-4 banks. Existing IT outsourcing agreements must comply with the provisions of these directions by April 10, 2026, while new IT outsourcing agreements must comply immediately.
What it means for you
These directions aim to ensure that Urban Co-operative Banks manage risks associated with outsourcing, particularly in IT services. This will help prevent potential risks and ensure the stability of the banking system.
What you must do
- Review existing IT outsourcing agreements and ensure compliance with the provisions of these directions by April 10, 2026
- Ensure that new IT outsourcing agreements comply with the provisions of these directions immediately
- Implement a governance framework for outsourcing, including a risk management framework and a business continuity plan
- Monitor and control outsourced activities, including IT services
Who it affects
Urban Co-operative Banks (all tiers for general provisions; Tier-3 and Tier-4 for IT-specific provisions)
What is the deadline for existing IT outsourcing agreements to comply with the provisions of these directions?
April 10, 2026
What is the immediate requirement for new IT outsourcing agreements?
Compliance with the provisions of these directions immediately
What is the scope of these directions?
These directions are applicable to all Urban Co-operative Banks, with a focus on IT outsourcing for Tier-3 and Tier-4 banks