of January 8, 2020 No. 1
About risk management when outsourcing
1. Approve the Instruction about risk management when outsourcing it (is applied).
Chairman of the board
Approved by the Resolution of Board of National Bank of the Republic of Belarus of January 8, 2020 No. 1
1. This Instruction establishes requirements to the organization of risk management by transfer by bank, "Development Bank of the Republic of Belarus" open joint stock company, non-bank credit and financial organization (further - bank) the separate functions, their parts, business processes, types of activity constituting their works, services on outsourcing, and also procedure for disclosure of information on outsourcing.
2. For the purposes of this Instruction outsourcing is understood as complete or partial transfer of separate functions by bank, their parts, business processes, types of activity constituting their works, services (further - functions), for accomplishment of third party or to person performing activities as the individual entrepreneur which act as the contractor of services and realization of function within the activities exercises process control (further - the outsourcing organization).
3. Determination of functions which the bank transfers (plans to transfer) on outsourcing, is performed by bank independently taking into account requirements of parts two and third this Item.
Functions which transfer on accomplishment of the outsourcing organization can entail threat of banking system stability of the Republic of Belarus and depositor protection and other creditors and (or) violation by bank of licensed requirements, stipulated in Clause 94 Bank codes of the Republic of Belarus and also it is capable to exert negative impact on efficiency of functions of internal control and control in the sphere of prevention of legalization of income gained in the criminal way, financings of terrorist activities and financing of distribution of weapons of mass destruction for the purpose of this Instruction are recognized crucial functions and are performed by bank independently.
Treat crucial functions:
corporate management by bank, including risk management in bank, internal control and internal audit of bank, the organization of system of compensations and remunerations;
activities in the sphere of prevention of legalization of income gained in the criminal way, financings of terrorist activities and financing of distribution of weapons of mass destruction, except as specified, when such activities according to legal acts can be carried out by the third parties;
and (or) lead decision making about implementation by bank of transactions and other transactions which results can significantly influence the level of the risks accepted by bank to creation of the provision menacing to safe functioning of bank and (or) interests of his investors and other creditors of bank;
financial accounting and creation of the accounting and (or) financial reporting;
banking activity, including implementation of transactions according to bank accounts of clients of bank, except as specified, when transfer on outsourcing is performed to the bank having special permission (license) for implementation of the corresponding banking activity.
4. In case of transfer of function on outsourcing the bank provides observance by bank and outsourcing organization of the following main conditions (principles):
confidentiality of information;
safety of information transfer;
personal data protection and the data which are bank secrecy;
disclosure in the consent of the client to information transfer (in writing, in the form of the electronic document or in other electronic form) structure of information which will be transferred and also the list of persons to which such information will be provided, specifying is more whole than use of information and the period during which information can be transferred to the third parties. In the consent of the client to information transfer the client's right to refusal of consent, withdrawal of earlier provided consent in full or partially is provided;
inadmissibility of transfer of banking activities on outsourcing, except as specified, when transfer on outsourcing is performed to the bank having special permission (license) for implementation of the corresponding banking activity.
The bank excludes possibility of transfer of function on outsourcing to residents of the foreign states entering the list of offshore zones - the states (territories) in which the preferential tax regime is effective and (or) disclosure and provision of information on financial transactions, No. 353 approved by the Presidential decree of the Republic of Belarus of May 25, 2006 is not provided.
The bank on regular basis performs assessment of financial stability of the outsourcing organization in the short-term and long term, including assets, the capital, liquidity, profit and losses.
In case of transfer of function on outsourcing the bank provides, including by inclusion of the corresponding conditions in agreements of outsourcing:
receipt of the documents of the outsourcing organization by bank necessary for assessment of the risks of bank connected with outsourcing;
safety, integrity and confidentiality of information obtained by the outsourcing organization from bank, including data which are the bank and protected by the law other secret.
5. In case of transfer of function on outsourcing the bank estimates as a part of operational risk and integrates the following types of risks connected with outsourcing into general risk management system of bank:
strategic risk - probability of implementation by the outsourcing organization of the activities contradicting common strategic objectives of bank, inadequate provisional estimate and (or) insufficient control of activities of the outsourcing organization from bank;
reputation risk - probability of receipt of low-quality services by bank, discrepancies of order of interaction of the outsourcing organization with the client to standards of bank, contradiction between rules of the outsourcing organization and the established regulations (ethical and others) bank;
komplayens-risk - probability of non-compliance with the legislation by the outsourcing organization, including about consumer protection, prudential regulations, requirements to confidentiality, and also non-compliance with the internal regulations and procedures of the outsourcing organization including concerning internal control, inadequacy of these rules and procedures;
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