The Reserve Bank of India (RBI) released a draft titled ‘Guidance on Regulatory Expectations for Data Governance’ this week, which could reshape data management practices across India’s fintech sector. The framework, open for public consultation until August 17, emphasizes that banks and NBFCs remain accountable for their data even when shared with fintech partners and technology service providers, signaling tighter oversight for these collaborations, according to inc42.com.
The draft framework mandates regulated entities to establish clear ownership of critical data, maintain end-to-end traceability, and strengthen oversight of third-party data sharing. While fintechs themselves are not directly regulated under this guidance, banks and NBFCs may impose stricter contractual and compliance demands on their technology partners. This could lead to increased scrutiny and higher compliance costs for fintech firms that support lending and technology infrastructure, inc42.com reported.
This development comes amid growing concerns over data privacy and security in India’s rapidly expanding fintech ecosystem. The RBI’s guidance aims to ensure that regulated entities retain control and accountability over their data, even when it is processed externally. The framework aligns with global trends emphasizing data governance and could influence how fintech partnerships evolve, especially in digital lending and cloud services sectors, per inc42.com.
Public comments on the RBI’s draft data governance framework are invited until August 17, marking a critical phase for stakeholders to influence the final regulatory approach. The RBI’s move underscores the central bank’s intent to strengthen data governance without directly regulating fintechs, focusing instead on the responsibilities of banks and NBFCs.