Bangladesh Bank has framed a draft guideline on outsourcing policy for scheduled banks in a bid to mitigate their (banks) risks.
According to the central bank’s draft guidelines, banking institutions throughout the world are increasingly using third parties (outsourcing) as a means of both reducing costs and achieving strategic aims.
When these third-party service providers conduct significant parts of the bank’s regulated and unregulated activities, it may impact on the ability of banks to manage their risks and monitor their compliance with regulatory requirements, the guideline said.
Against the backdrop, the central bank has taken initiative to bring the banks under a guideline for their outsourcing activities, a BB official told New Age on Sunday.
The central bank has already issued a letter to managing directors and chief executive officers of all banks asking them to send their opinion on the draft guideline, he said.
The banks usually receive services from third party for different type of business like credit card, SME service centre, mobile banking, consumer credit, and to develop their information technology and set up new software.
According to the guideline, the banks will have to develop a comprehensive outsourcing policy duly approved by their board of directors.
The policy will select the banking activities which will be conducted by the outsourcing parties.
The board has overall responsibility for ensuring that all ongoing outsourcing decisions taken by the bank, and activities undertaken by the third parties, are in accordance with its outsourcing policy, the draft guideline said.