Review of the outsourcing policy for registered banks

Release date
28/03/2017

Status: The Reserve Bank has published an exposure draft of the new policy for consultation, along with a list of pre-approved functions and services and the white list (discussed in the consultation paper). The consultation closes on 26 May 2017. Following this, the Reserve Bank anticipates publishing the final policy by the end of Q2 2017.

Consultation period: Consultation closes on 26 May 2017

28 March 2017

The Reserve Bank has added a Word version of the exposure draft to assist submitters providing feedback.

21 March 2017

Following the release of final policy decisions on 2 February 2017, the Reserve Bank has today published an exposure draft for public consultation before the revised policy is finalised.

The Reserve Bank would like to hear of any instances where stakeholders believe the wording of the exposure draft is unclear, could be interpreted in more than one way, or differs in substance to what is set out in the final policy decisions document. The Reserve Bank will consider any concrete drafting suggestions made by submitters that are aimed at clarifying the wording of the policy. However, submitters should keep in mind that the substance of the revised policy has been finalised and that the Reserve Bank is not seeking feedback on the policy decisions that have been made.

2 February 2017

In 2015 and 2016, the Reserve Bank ran public consultations about proposed changes to the outsourcing policy in the Banking Supervision Handbook.

The Reserve Bank has made its final policy decisions, and today published document outlining the final policy decisions, a summary of the submission feedback to the two consultations, and a regulatory impact statement.

23 May 2016

The Bank published a second consultation document on its review of the outsourcing policy for registered banks. The consultation closed on 12 August 2016. The consultation proposed to retain the objectives of the existing policy and supports banks’ continued use of outsourcing arrangements, but made changes to some of the policy proposals in the 2015 consultation paper, including:

  • Requiring banks to have a robust back-up arrangement on key functions they want to outsource;
  • Retaining the existing threshold for the outsourcing policy;
  • A definition of basic banking services; and
  • Extending the transitional path to compliance to 5 years.

Second consultation document: Review of the outsourcing policy for registered banks (PDF 214KB)

26 August 2015

The Bank published a consultation document on potential changes arising out of the review of the outsourcing policy for registered banks. The consultation closed on 4 December 2015. The consultation proposes to retain the objectives of the existing policy and supports banks’ continued use of outsourcing arrangements, but also proposes to update the objectives to better align with Open Bank Resolution and to provide more clarity on the policy. The main changes relate to:

  • requiring an explicit requirement for a separation plan for subsidiaries of foreign-owned banking groups;
  • setting out a list of functions that are not relevant for the outsourcing policy or cannot be outsourced;
  • setting out a clear process for obtaining non-objection from the Reserve Bank for outsourcing proposals;
  • requiring a compendium of outsourced functions; and
  • possibly aligning the application of the outsourcing policy with OBR.

First consultation document: Review of the outsourcing policy for registered banks (PDF 217KB)

Submissions for publication

The Reserve Bank is also publishing the individual submissions received. In the list below, responses to the 2015 consultation are marked as round 1, while responses to the 2016 consultation are marked round 2.