RBI Data Security Rules: RBI has issued new draft rules regarding data security for banks and NBFCs. There will now be strict monitoring of customer personal information security, data governance and cyber risks.
RBI Draft Guidelines: In the era of digital banking, customer data has become one of the most valuable assets. In such a situation, if banks or NBFCs are negligent in protecting your personal information, then now they may have to face strict liability. The Reserve Bank of India (RBI) has issued new draft rules to strengthen data security and data governance. Their aim is to better protect customer information from cyber threats and data leaks.
Every bank and NBFC will have to create a data security framework
According to the draft proposal of RBI, all banks, NBFCs and other financial institutions under it will have to prepare a data risk management system. This system will help institutions identify, monitor and control data risks.
The Reserve Bank says data is now one of the most important assets of financial institutions due to the increasing use of digital services. Therefore, it will be the primary responsibility of the institutions to ensure the security, quality and proper use of data.
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There will be direct monitoring of data governance committee and board.
Under the new draft rules, every regulated entity will have to form a data governance committee or assign this responsibility to an existing senior committee. This committee will include officials related to data, information technology (IT), information security, business, risk management and compliance. Apart from this, the Board of the concerned institution will monitor the entire data governance framework and will also review it from time to time, to ensure adherence to data security standards.
Customer data will be monitored at every step
RBI has proposed that customer data be kept secure throughout its life cycle, from collection to use, storage and deletion. Institutions must also ensure that data is collected only for legitimate and prescribed purposes and that its use is in accordance with all legal and regulatory provisions.
The Reserve Bank has sought suggestions from banks, financial institutions and other concerned parties till August 17 on these draft rules. Final guidelines will be issued after reviewing the suggestions. RBI believes that strong data governance mechanisms will reduce the risk of cyber attacks, data leaks and financial losses, making digital banking more secure and reliable than ever before.
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