Reserve Bank seeks submissions on proposed outsourcing rules
The Reserve Bank is seeking submissions on proposed amendments to rules about outsourcing of services by registered banks.
If implemented, the rules would give the Reserve Bank better assurance about the provision of basic ongoing banking services in the event of service disruption, while allowing banks to capture the efficiency benefits of robust outsourcing arrangements.
The current rules state a range of outcomes that banks must be able to deliver on an on-going basis, and apply to locally incorporated banks with New Zealand liabilities of more than $10 billion.
After an initial round of consultation last year, the Reserve Bank is now proposing revised rules based on feedback it has received.
The revised proposals allow banks greater flexibility in achieving the desired policy outcome. Changes to the proposed policies include:
- maintaining the existing $10 billion threshold for the outsourcing rules;
- a more detailed definition of basic banking services;
- an outcomes based policy where the outsourcing of critical functions is not prohibited, provided there is robust back-up capability;
- a more comprehensive list of functions that will not be captured by the outsourcing rules; and
- a five year transition path to compliance.
Submissions close on 12 August 2016.
The Reserve Bank started reviewing the outsourcing rules in 2015, due to inconsistent application of the existing outsourcing policy by banks over a number of years.
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