Daily Dash: RBI Says Time For FIs To Get Smart About Internal Compliance Monitoring

February 6, 2024
India’s central bank has ordered a review of internal compliance monitoring processes among regulated entities, and the Bank of Japan has confirmed that it will switch to the latest version of ISO 20022 in November 2025.

Time For FIs To Get Smart About Internal Compliance Monitoring, Says RBI

The Reserve Bank of India (RBI) has written to all regulated financial institutions (FIs) requesting that they conduct a “comprehensive review” of their internal compliance monitoring and tracking processes.

If necessary, FIs are asked to implement changes to their existing systems or implement new systems by June 30, 2024.

The RBI’s request comes after the central bank carried out an assessment of a sample group of FIs and their internal compliance monitoring practices.

The RBI wanted to find out the extent of use of technological solutions to support compliance with regulatory instructions, and found that automation of these processes is a “work in progress”.

“It is seen that supervised entities have adopted varying levels of automation to support this function, ranging from use of macro-enabled spreadsheets to workflow-based software solutions,” said the RBI.

“There is, thus, a need to implement comprehensive, integrated, enterprise-wide and workflow-based solutions and tools to enhance the effectiveness of this function.”

Bank Of Japan Confirms November 2025 Migration To Latest ISO 20022 Version

The Bank of Japan (BOJ) has confirmed that it will migrate to version 8, the latest version of the ISO 20022 messaging standard, in November 2025.

The central bank will introduce the new messaging standard to the Bank of Japan Financial Network System (BOJ-NET).

This is the payment system the BOJ uses for foreign exchange yen settlements and current account transactions related to deposits of overseas institutions.

The BOJ’s migration will therefore coincide with the end of the co-existence period during which MT, an older messaging format, and ISO 20022 can both be used on Swift.

Tata Reportedly Set For Faster Payments Takeover In UK

Tata, India’s largest conglomerate, could be set to take over the operation of the UK's Faster Payments Service (FPS), according to a report from Sky News

If successful, Tata would take over from Mastercard-owned Vocalink. In the Sky News report, Tata is said to be the “leading contender” to succeed Vocalink.

However, the appointment of a new operator of the FPS will be put on hold until the government publishes a revised sector strategy.

Known as the "Vision for Payments", the strategy was informed by last year's review of the payment sector by the Treasury and former Nationwide CEO Joe Garner.

A Tata takeover of the FPS could provoke a backlash, following mass redundancies at the Tata-owned Port Talbot steelworks. Last month, Tata Steel confirmed that 2,800 roles in the UK would be cut.

India Warns Against Rising Fraud Under The Guise Of KYC Updation

The Reserve Bank of India (RBI) has issued a warning to members of the public to be alert for fraud attempts under guise of updating know your customer (KYC) requirements.

Due to “continuing incidents” of customers falling prey to these attempts, the RBI has urged the public to contact their financial service provider directly in the event of receiving any request for KYC updation.

According to RBI rules, last updated in January 2024, regulated entities must adopt a “risk-based” approach to periodic updation of KYC.

For high-risk customers, updation should be carried out at least once in every two years; for medium risk customers, once every eight years; and for low-risk customers, once every ten years.

Members of the public should use the National Cyber Crime Reporting Portal or through cybercrime helpline if they have been targeted by KYC updation fraud.

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