How CSPM Accelerates RBI Compliance – A Look into Compliance Checklist for BFSI Companies

A detailed checklist of RBI guidelines for BFSI companies and how intelligent CSPM solutions can help accelerate compliance effectively.

In today’s digital era, the Banking, Financial Services, and Insurance (BFSI) sector in India has become more vulnerable to cyber threats than ever before. According to Indian Ransomware Report 2022, there has been a 53% increase in ransomware attacks, with the finance sector a key target. To avoid such attacks and improve security, the Reserve Bank of India (RBI) has introduced regulatory compliance guidelines with which BFSI organizations must comply. These regulations include guidelines on data protection, cybersecurity, and risk management.

This is where BFSI companies need sound cloud security posture management (CSPM). It ensures compliance with RBI guidelines and avoids consequences such as legal penalties, reputational damage, and loss of customer trust. This article will focus on the checklist BFSI organizations need to comply with RBI guidelines and how CSPM can help accelerate it.

The Importance of Compliance Checklist for BFSI against RBI

RBI regulations are a set of guidelines that helps BFSI companies improve cybersecurity against attacks like ransomware, malware, and social engineering practices. A cyber-attack can cause financial losses and lead to the loss of sensitive customer data causing severe implications for BFSI businesses. Therefore, BFSI companies must comply with RBI guidelines and maintain a robust compliance checklist.

Compliance Checklist for BFSI against RBI

The compliance checklist includes cybersecurity, data protection, and risk management guidelines.

#1. Know Your Customer (KYC) Guidelines

RBI guidelines for KYC prevent illegal activities and malicious usage of user data stored, processed, and analyzed by financial institutions. RBI has issued detailed guidelines on KYC requirements for several types of customers, including individuals, companies, trusts, and non-profit organizations. BFSI companies need high-security infrastructure to store the KYC information of users securely.

#2. Customer Identification Process (CIP)

BFSI companies must follow a strict customer identification process (CIP) to comply with RBI guidelines. Especially when a user opens a new account with a bank or non-banking financial company, it is imperative to record all information. An ideal process for CIP will include,

  • Gathering credentials or proof of the customer’s identity, such as an Aadhaar card, PAN card, passport, or driving license.
  • Ask for the customer’s address proof, such as utility bills, bank statements, or rent agreements.
  • Conducting a risk assessment of the customer based on factors such as the nature of the business, location, and financial history.

#3. Ongoing Due Diligence

BFSI companies must regularly audit customer transactions and conduct ongoing due diligence on their accounts to ensure there are no illegal activities. This includes

  • Monitoring transactions and activities to check for high-risk behavior.
  • Updating customer information and verifying their identity periodically.
  • Conducting enhanced due diligence for high-risk customers, such as politically exposed persons (PEPs) or those with a higher risk of money laundering.

#4. Record Keeping

BFSI companies need to maintain proper records of all customer transactions and activities, including their identity, the purpose of the transaction, and the source of funds. These records should be maintained for a minimum of five years and made available to the authorities upon request 24/7/365.

#5. Reporting of Suspicious Transactions,

BFSI companies need to report any suspicious transactions to the authorities, as per the guidelines issued by RBI. Suspicious transactions include those that are unusual, have no apparent economic or lawful purpose, or are inconsistent with past transactions.

#6. Cyber Security Guidelines

With the increasing use of technology in the financial sector, cyber security has become a critical concern for BFSI companies. RBI has issued detailed guidelines on cyber security that BFSI companies must comply with to ensure the security and confidentiality of customer information.

For example, BFSI companies must ensure that the organization’s roles and responsibilities are well-defined. This includes the creation of an organizational framework and defining IT governance stakeholders, such as

  • Board of Directors
  • IT Strategy Committees
  • CEOs
  • Business Executives
  • CIOs
  • IT Steering Committees
  • Chief Risk Officer (CRO)
  • Risk Committees

Organizations need to have an IT strategy committee, which performs the following functions,

  • Have an oversight on the IT steering committee that focuses on project tracking and resource allocation
  • Investigate all the transactions and activities within the scope
  • Seek the information of employees
  • Secure systems by reporting any external data access

#7. Information Security

BFSI companies need robust information security policies and procedures to protect their systems from unauthorized access or misuse. Information security needs effective security policies based on confidentiality, integrity, identification, authorization, availability, and accountability.

This includes implementing the following policies,

  • Assess existing hardware and networking architecture for better coverage in information security policies
  • Prescribe standards for hardware or software required for the systems
  • Employ enhanced IT governance strategies to ensure higher data security across applications
  • Establish and maintain enterprise architecture framework to enable secure application development and consistent IT strategy

#8. Incident Management

BFSI companies need a proper incident management plan to ensure that any cyber security incidents are promptly detected, reported, and addressed. The incident management plan should include the following:

  • Identification and classification of incidents based on severity and impact
  • Immediate response to contain the incident and prevent further damage
  • Investigation and analysis of the incident to identify the cause and extent of the damage
  • Reporting the incident to the authorities and customers, per the guidelines issued by RBI

#9. Risk Management

BFSI companies need a robust risk management framework to identify and manage the risks associated with their business activities. The risk management framework should include the following:

  • Risk assessment and identifying critical risks associated with the company’s operations
  • Implementation of risk mitigation strategies and controls to reduce the likelihood and impact of risks
  • Regular monitoring and reporting of risks to the AWS board and senior management

#10. Application security and data access control

Financial institutions in the BFSI sector have different apps across core banking systems like ATMs, internet banking, mobile banking, Enterprise Resource Management (ERP), and more. Each application must have an owner, usually the corresponding business function that employs the application. The roles of the application owner comprise prioritizing changes made to the app and deciding on data classification and archival procedures based on relevant policies.

Ensuring the integration of adequate controls into the application design, development, testing, and modification process are also crucial steps for better app security.  Ensuring that the information security function reviews the application is also crucial.

How Does CSPM Ensure RBI Compliance on AWS and Azure environments?

Cloud security posture management (CSPM) is a set of security tools and policies used to manage, identify, and remediate data security risks and compliance in cloud environments. CSPM tools automate security checks and compliance assessments, allowing businesses to manage their cloud security posture efficiently.

CSPM tools typically use machine learning and artificial intelligence to identify and remediate real-time security risks and compliance issues. By using CSPM tools, organizations can ensure that their AWS and Azure cloud environments are configured in compliance with RBI regulations.

One of the key benefits of using cloud security posture management tools is better visibility. CSPM tools provide real-time visibility into the security posture of the AWS cloud environment, enabling organizations to respond to security incidents quickly. Further, such solutions help BFSI organizations monitor the Azure environment for potential security issues.

Here is how an effective CSPM solution can ensure RBI compliance in the Cloud environments.

  • Continuous Monitoring: CSPM is a process that continuously monitors cloud resources, which helps organizations to identify and remediate misconfigurations, vulnerabilities, and threats
  • Enforce Compliance Policies: CSPM enforces compliance policies for cloud resources, ensuring that organizations maintain the confidentiality, integrity, availability, and security of their data on the cloud
  • Visibility and Control: CSPM provides organizations with visibility and control over their cloud assets, allowing them to maintain their data’s security and reduce the risk of data breaches
  • Automated Remediation: CSPM offers automated remediation capabilities, which makes it easier for organizations to fix security issues in real-time
  • Reporting Capabilities: CSPM provides reporting capabilities, which allow organizations to measure their security posture, comply with regulations, and identify areas for improvement


BFSI companies must ensure data security, privacy, and operational efficiency amidst technological disruptions for enhanced RBI compliance essential. Nevertheless, achieving RBI compliance can be a difficult and expensive process without the necessary tools and guidance.

The right CSPM tool can offer cloud security and data governance for better compliance. Cloudlytics is an intelligent CSPM tool that integrates the AWS Well-Architected Framework. It automates cloud audits, identifies risks, and provides remediation recommendations.

Cloudlytics also offers a regulatory sandbox feature that allows BFSI companies to test their innovations in a safe and controlled environment. Using Cloudlytics, BFSI companies can comply with RBI regulations and leverage cloud computing for higher business performance.

To learn more about how Cloudlytics can help achieve RBI compliance, contact us now.

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Abhijeet Chinchole

Abhijeet Chinchole

Abhijeet Chinchole is Chief Technology Officer at Cloudlytics. Over the years, Abhijeet has helped numerous global businesses transition to the cloud by helping them with strategy and implementation. He is also an expert on cloud migration, cloud security, and building modern SaaS applications. When not working, he likes to drive and don the hat of a creative tinkerer.


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