More Stories

Informist, Monday, Jul 22, 2024

--RBI Rao: Regulated bodies increasingly relying on third-party agencies 

--RBI Rao: Regulated bodies must see compliance of third-party entities 

--RBI Rao: Regulated entities below expectations in transparency in ops 
--RBI Rao: Poor third-party relationships may invite regulatory actions 
 

MUMBAI – The rise in the dependency of regulated entities on third-party agencies is a cause for concern for the Reserve Bank of India, Deputy Governor Rajeshwar Rao said at the BFSI Summit held by CareEdge today. He said that regulated entities need to ensure that their third-party agencies meet the required regulatory standards.

"Poorly managed third-party relationships can expose regulated entities to not only customer dissatisfaction and reputational damage, but may also invite regulatory and supervisory actions," Rao said. 

He also said that cybersecurity is another area where regulated entities need to assess the preparedness of third-party service providers to protect their digital assets and customer information. "With the increasing frequency and sophistication of cyber-attacks, it is essential for entities to ensure that robust cybersecurity measures are deployed by the service providers to safeguard against threats." he said.

Rao also said the dependency of banks and non-bank lenders on third parties can create vendor lock-in situations, where regulated entities become reliant on a single vendor for critical services. This lack of vendor diversification can increase dependency risks and limit the flexibility of entities to adapt to changing market conditions or technological advancements, he said.

While talking about the importance of customer conduct and the transparency of operations of regulated entities, Rao said regulated entities have fallen short of expectations. "Certainly, we all understand that poor customer service can have significant repercussions on customers' trust and satisfaction. However, we continue to observe instances of slow response times to customer queries and complaints, lengthy wait times on customer service hotlines and delayed email responses, contributing to customer dissatisfaction," Rao said.

Rao said that there are still some entities that are not transparent to their customers regarding fees, charges and penal provisions associated with their products. He urged regulated entities to put in place robust mechanisms to address customer concerns promptly, transparently and effectively. 

He said that while RBI will keep focussing on customer-centric regulations, it bears repetition that enhancing consumer protection, strengthening grievance redressal mechanisms, and promoting transparency should be a collective attempt of both the regulator and regulated entities.  End

Reported by Kshipra Petkar

Edited by Aditya Sakorkar

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2024. All rights reserved.