Friday, October 4

RBI’s Directions To Improve Cyber Resilience across Digital Payments Ecosystem

The Reserve Bank of India (RBI) has taken a significant step towards bolstering the security of India’s digital payments ecosystem with the release of its Draft Master Directions on Cyber Resilience and Digital Payment Security Controls for Payment System Operators (PSOs) on June 2, 2023. These Directions aim to improve overall information security preparedness, with a strong focus on cyber resilience, and are a testament to the RBI’s commitment to safeguarding the integrity and reliability of digital transactions in India.

A Multi-Layered Approach to Security:

The Directions adopt a comprehensive approach to security, encompassing multiple layers of protection:

  • Governance and Accountability: PSOs are mandated to establish a Board-approved Information Security (IS) policy, outlining clear roles, responsibilities, and processes for managing security risks. This ensures a strong foundation of accountability and oversight.
  • Baseline Security Measures: PSOs are required to implement a robust set of baseline information security measures, covering areas like:
    • Inventory Management
    • Identity and Access Management
    • Network Security
    • Application Security Life Cycle
    • Security Testing
    • Vendor Risk Management
    • Data Security
    • Patch and Change Management
    • Incident Response
    • Business Continuity Planning
    • Employee Awareness Training
  • Digital Payment Security: Specific security controls are mandated for mobile payments, card payments, and prepaid payment instruments (PPIs), ensuring that these critical payment methods are adequately protected.

Extending Security to the Entire Ecosystem:

The Directions recognize that the digital payments ecosystem is interconnected, and security must extend beyond just regulated entities. PSOs are responsible for ensuring that unregulated entities within their ecosystem, such as payment gateways, third-party service providers, vendors, and merchants, adhere to the Directions. This is achieved through:

  • Direct Responsibility: PSOs are directly accountable for ensuring compliance from unregulated entities.
  • Organizational Policies: PSOs must establish clear policies outlining how they will manage security risks across the entire ecosystem.
  • Cyber Risk Assessments: PSOs are required to conduct thorough risk assessments that consider the potential vulnerabilities arising from linkages with unregulated entities.
  • Vendor Risk Management: Stringent vendor risk management practices are mandated to ensure that all vendors, including unregulated entities, meet the required security standards.

Building Cyber Resilience:

The Directions aim to improve cyber resilience across the digital payments ecosystem through a multi-faceted approach:

  • Proactive Risk Management: The Directions emphasize the importance of conducting thorough cyber risk assessments, defining and monitoring Key Risk Indicators (KRIs) and Key Performance Indicators (KPIs).
  • Robust Security Measures: The Directions mandate the implementation of baseline information security controls and specific security controls for digital payment methods.
  • Incident Response and Recovery: PSOs are required to develop a Cyber Crisis Management Plan (CCMP), a Business Continuity Plan (BCP), and establish a Disaster Recovery (DR) facility.
  • Ecosystem-Wide Security: The Directions extend compliance to unregulated entities and emphasize robust vendor risk management practices.
  • Continuous Improvement: The Directions encourage PSOs to conduct regular audits and provide employee awareness training.

A Stronger Future for Digital Payments:

By implementing these comprehensive measures, the RBI’s Draft Master Directions aim to build a more secure and resilient digital payments ecosystem in India. This will foster greater trust and confidence in digital transactions, paving the way for a more inclusive and efficient digital economy.

Link to Original Notification: Reserve Bank of India – Database (rbi.org.in)

Also Read: Cybercrime in India: A Looming Threat as Losses Exceed ₹1,750 Crore in First Four Months of 2024


Discover more from NewNerve

Subscribe to get the latest posts sent to your email.

3 Comments

Leave a Reply

Your email address will not be published. Required fields are marked *