The Reserve Bank of India (RBI) has issued a draft Guidance on Regulatory Expectations for Data Governance, targeting banks, non-banking financial companies (NBFCs), and other regulated entities. The draft outlines a comprehensive framework for managing data throughout its lifecycle, from collection to disposal, addressing persistent weaknesses in data governance identified by the RBI. The guidance aligns with international standards, including the Basel Committee's BCBS 239 principles, and was released this week, according to medianama.com.
The draft mandates regulated entities to adopt a lifecycle-based approach to data governance. At data collection, entities must collect data only for defined business, legal, or regulatory purposes, establish ownership, classification, intended usage, and obtain customer consent where applicable. Systems must validate data for completeness and consistency, and the same governance standards must apply to third-party data. During processing or sharing, entities must use approved rules, protect data through encryption, tokenisation, anonymisation, assign accountability for derived datasets, conduct impact assessments, and ensure traceability to the source, medianama.com reports.
This guidance addresses ongoing challenges in financial institutions' data management, aiming to strengthen data integrity, security, and accountability. By aligning with BCBS 239 principles, the RBI seeks to enhance risk data aggregation and reporting capabilities, critical for regulatory compliance and operational resilience. The framework's emphasis on lifecycle governance and security controls reflects global trends in financial data regulation, positioning Indian banks and NBFCs to meet evolving supervisory expectations.
The RBI's draft guidance is open for stakeholder feedback before finalisation. The consultation period and final implementation timeline have not been specified in the draft, but the RBI's move signals increased regulatory focus on data governance in India's financial sector, as detailed by medianama.com.