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RBI Issues Framework for "Cloud Computing Risk Management" for Banks.

Banking & Finance | Dated: 29 Dec 2025

The Reserve Bank of India (RBI) has issued a comprehensive "Master Direction on Information Technology Governance and Cloud Risk Management". The framework mandates banks and NBFCs to implement stricter controls when outsourcing IT services to cloud service providers (CSPs). It aims to ensure data sovereignty and operational resilience.

🎯 Key Highlights:

  • Banks must ensure that critical data resides within India (Data Localization) even if processed on the cloud.
  • It requires a mandatory "Exit Strategy" clause in contracts with cloud providers to avoid vendor lock-in.
  • A Board-level IT Strategy Committee must oversee cloud adoption plans.

💡 Other Important Facts:

  • Guideline: Cloud Computing Risk Management.
  • Key Mandate: Data Localization.
  • Risk Addressed: Vendor Lock-in.

📚 Test Your Knowledge:

RBI's new framework mandates banks to have a mandatory "Exit Strategy" to avoid which specific risk with cloud providers?

Correct Answer: Vendor Lock-in

🚀 Quick Recap:

About RBI

  • Governor – Shaktikanta Das
  • HQ – Mumbai