Implementation Guidelines for RBI Master Direction on IT Governance, Risk, Controls and Assurance Practices.

The RBI Master Direction aims to enhance the IT governance, risk management, controls, and assurance practices of regulated entities (REs). The Master Direction consolidates and updates previous guidelines on IT governance, risk, controls, assurance practices, and business continuity/disaster recovery management. It applies to scheduled commercial banks (excluding regional rural banks), small finance banks, payments banks, non-banking financial companies, credit information companies, and all India financial institutions.  The Master Direction comes into effect from 1 April 2024 and is applicable to following entities:

• All Banking Companies, including those incorporated outside India and licenced to operate in India (‘Foreign Banks’), Small Finance Banks (SFBs), and Payments Banks (PBs).
• Non-Banking Financial Companies (NBFCs) classified as ‘Top Layer’, ‘Upper Layer’ and ‘Middle Layer’.
• Credit Information Companies (CICs).
• All India Financial Institutions (AIFIs), such as EXIM Bank, NABARD, NaBFID, NHB, and SIDBI

Key aspects of the Master Direction include:

• Establishing a robust IT governance framework with a clear governance structure and processes.
• Defining the roles and responsibilities of the Board of Directors, senior management, and the head of the IT function.
• Implementing comprehensive information security and cyber security policies and frameworks.
• Conducting regular risk assessments, vulnerability assessments, and penetration testing.
• Putting in place effective business continuity and disaster recovery plans.
• Establishing an independent IS audit function.

Complying with Master Direction involves sustained efforts. Regulated Entities can adopt a phased approach for conducting gap assessment and ensuring compliance with the RBI Master Direction.

A recommended process includes:

• Gap Assessment: Conduct a thorough gap assessment to identify areas where existing practices fall short of the requirements outlined in the Master Direction.
• Control Implementation: Develop and implement appropriate controls and processes to address the identified gaps.
• Re-assessment: Regularly re-assess the implemented controls and processes to ensure their effectiveness and make necessary adjustments.
• Monitoring and Reporting: Establish mechanisms for monitoring compliance with the Master Direction and reporting relevant information to the Board and senior management.

Implementation Checklist for RBI Master Direction for IT

The following table provides a checklist of key implementation items along with detailed guidelines and relevant questions to aid in tracking progress.

Note: It is important to note that this checklist is not exhaustive, and organisations should refer to the complete RBI Master Direction for detailed requirements or reach out to CyberNX for detailed discussion on compliance requirements.

CyberNX can assist Regulated Entities (REs) in conducting comprehensive gap assessments and achieving compliance with RBI Master Directions. Our services include implementing controls and automating compliance processes, creating dashboards, generating detailed reports, and more. Contact us today to streamline your RBI Master Direction compliance journey.