RBI slams foreign banks on data rule

The Reserve Bank of India (RBI) has pulled up several multinational banks operating in the country for not providing a board-approved system audit report certifying compliance with its data-localisation norms. In a recent communication, the RBI said that a majority of banks are yet to submit system audit reports certifying compliance to data storage norms even after three years since the issuance of the circular. It also said that many foreign banks have said that the audit norms did not apply to them and this was not acceptable. The central bank had asked banks to submit their compliance along with a plan of action on or before May 15, 2021. Sources said that recently, the banking regulator had a discussion with some of the foreign banks where it made its displeasure known. According to sources, several foreign banks have been unable to issue an audit report stating that all personal and non-personal transaction data which has been sent overseas for processing has been permanently deleted. Last month, the central bank barred American Express Bank and Diners Club from on-boarding new customers citing violation of data storage norms.