Certain fields of static information such as customer name and address, some do-it-yourself customer details as well as select transaction details such as date and amount, beneficiary name, and reference number may be stored abroad by foreign banks. This was informed by the regulator to the Indian Banks’ Association a week ago (IBA), an industry source told ET.
“It is giving a small leeway to foreign banks. There are around 40 data fields, of which around 30 are critical. After several meetings and representations, RBI has now allowed banks to keep a handful of data fields overseas. Me This seems to end the matter which has been debated for more than three years now. Further concessions are unlikely, and banks should implement this ASAP,” said a banker.
The need for ‘unfettered supervisory access’
However, RBI has turned down requests from foreign banks to store information like mobile numbers and ‘purpose of remittance’ in servers abroad. IBA may go back to RBI to find out the time frame for implementing the regulation based on the latest communication.
An RBI spokesperson did not comment on the matter.
On April 6, 2018, RBI told bank CEOs that all system providers must ensure that entire data relating to payment systems operated by them is stored in only one system in India. Such data includes complete end-to-end transaction details, information collected, processed, processed as part of a message or payment instruction. However, for cross-border transactions, data for the foreign leg of the transaction was allowed to be stored abroad.
The central bank then clarified that in order to achieve data security and better monitoring, “unfettered supervisory access to data stored with these system providers as well as with their service providers/intermediaries/third party vendors and other entities in payment It was important to have an ecosystem.”
Any transaction throws up a lot of data – bank details, identifiers for the beneficiary and sender, merchant details, transaction IDs, text alerts, etc. Banks were told that even if payment data flowed abroad, the information had to be removed from foreign servers within 24 hours. Hours, copies of them are being stored ashore. A few months ago, major foreign banks appealed to the RBI to allow some transaction data to be stored abroad to check money laundering deals and sanctions. Another person said, “They had asked for a lot of data, but RBI has finally allowed only 6 to 7 fields.”
Foreign banks, which operate primarily through branch offices in India, have their own anti-money laundering software engines generating suspicious transaction alerts in offshore locations. Sanctions checking, in banking parlance, refers to the verification of names (or surnames among them) on acceptance lists involved in financial transactions. Multiple approval lists are compared as payment flows are processed and messages are displayed in real time. In MNC Bank The regulator had told the regulator that it is important to have a global pool of information to track money-laundering transactions as fragmentation of information can lead to lost money-flow routes.