[MTE] [Mar 2025] [P5&P6] Decoding RBI's Operational Resilience Framework: Approaches and Challenges

Part 5: Key Implementation Strategies for RBI’s Operational Resilience Guidance

With the introduction of the Reserve Bank of India’s (RBI) Guidance Note on Operational Risk Management and Operational Resilience in April 2024, financial institutions across India are actively working towards implementing the regulatory requirements.

Since operational resilience is a relatively new concept in the Indian regulatory landscape, institutions are learning from one another and adopting best practices to ensure compliance.

This blog outlines the key implementation strategies organisations should follow to align with RBI’s guidelines successfully and build a robust operational resilience framework.

Obtain Board and Management Consent

The first and most crucial step in the implementation journey is securing approval from the Board of Directors and senior management. This includes:

• Gaining consensus on the project kickoff and budget
  
  
• Defining the level of maturity the organisation aims to achieve in operational resilience.
  
  
• Ensuring continuous Board oversight throughout the implementation process.

Since RBI has not specified strict timelines for compliance, financial institutions are adopting different approaches. Some are aggressively working towards full compliance, while others are taking a phased approach based on their size, scale, and operational complexity.

Establish a Steering Committee

A dedicated Operational Risk and Resilience Committee should be formed, comprising key stakeholders and leadership teams responsible for implementing the framework. This committee will:

• Define and allocate roles and responsibilities for various teams.
  
  
• Oversee the implementation process to ensure alignment with the regulatory framework.
  
  
• Serve as a governance body to track progress and provide strategic direction.

Conduct a Comprehensive Gap Assessment

A Gap Assessment is essential to identify areas where the organisation falls short of RBI’s expectations. This involves:

• Conducting a process walkthrough to review existing policies, frameworks, and controls.
  
  
• Comparing the current state with RBI’s regulatory requirements.
  
  
• Identifying incremental changes required to align with operational resilience principles.

Once the gaps are identified, institutions must present their findings to the Board and secure approval on the scope, budget, and resources required for implementation.

Design and Develop the Framework

Once the gap assessment is complete, organisations move to the design and development phase, which includes:

• Defining a framework for critical operations.
  
  
• Conducting a Business Impact Analysis (BIA) to identify essential functions and third-party dependencies.
  
  
• Establishing risk appetite and tolerance thresholds.
  
  
• Developing policies and procedures for:
  • Change Management (covering products, services, processes, and systems).
  • Third-Party Risk Management (including risk assessment, continuous monitoring, and exit strategies).
  • Incident Management (covering operational risk incidents beyond IT-related events).
  • ICT & Cybersecurity Resilience (ensuring alignment with governance and risk oversight requirements).
  • Disclosure and Reporting (ensuring losses and disruptions are reported to the regulator as required).
  • Outlining the implementation steps along with target dates.

Execute Implementation Plan

With the framework in place, organisations:

• Implement new policies and controls to address identified gaps.
• Align internal processes with RBI’s operational resilience expectations.
• Integrate operational resilience requirements into existing risk management frameworks.
• Ensure continuous Board and management oversight throughout execution.

Conduct Organisation-Wide Training

Building a resilient organisation requires a cultural shift. Employees at all levels must be trained on:

• The fundamentals of operational resilience and risk management.
  
  
• Their roles and responsibilities in ensuring resilience.
  
  
• Best practices for incident response and crisis management.
  
  
• How operational risk frameworks align with business continuity and third-party risk management.

This training should not be limited to senior management—every employee should understand their contribution to the organisation's resilience.

Establish a Continuous Monitoring and Improvement Process

Monitoring is a continuous process that ensures ongoing compliance and effectiveness of the resilience framework. Key aspects of monitoring include:

• Regular reporting to the Board on implementation progress and risk indicators.
  
  
• Stress testing and scenario analysis to assess resilience under different conditions.
  
  
• Conducting root cause analysis of incidents and integrating lessons learned into future strategies.
  
  
• Reviewing third-party risk management frameworks to ensure vendors and service providers remain compliant.

Most financial institutions in India are still in the implementation phase, actively aligning their processes with RBI’s guidance. However, the ultimate goal is to reach the monitoring phase, where resilience is continuously assessed and improved.

Summing Up for Part 5 ...

Implementing RBI’s Operational Risk Management and Resilience Framework requires a structured and strategic approach. Financial institutions can build a robust resilience strategy by securing Board approval, establishing a governance committee, conducting a gap assessment, and implementing a comprehensive framework.

However, compliance is not just about documentation—it requires actual implementation, cultural adoption, and continuous monitoring to ensure sustainable resilience against operational risks. Financial institutions must remain agile, continuously improving their frameworks to adapt to evolving threats and regulatory expectations.

Dr Goh Moh Heng, President of BCM Institute, summarises this webinar. If you have any questions, please speak to the author.

Part 6: Navigating the Challenges in Implementing RBI’s Operational Resilience Framework

The Reserve Bank of India’s (RBI) Guidance Note on Operational Risk Management and Operational Resilience, introduced in April 2024, outlines a comprehensive framework that financial institutions must adopt. While the intent behind the regulation is clear—ensuring resilience in the face of disruptions—the actual implementation of the framework presents significant challenges.

If you’re currently involved in embedding operational resilience in your organisation, you’ve likely encountered some, if not all, of these challenges firsthand. The regulatory document, over 50 pages, sets high expectations, making it a complex, resource-intensive, and multi-departmental effort.

Let’s examine the key challenges that organisations face in implementing this framework and explore strategies for navigating them.

Complexity of Interconnections and Interdependencies

One of the biggest challenges is the sheer complexity of the resilience framework. Financial institutions operate with multiple interdependent processes, departments, and third-party relationships. Mapping these interconnections to ensure seamless business continuity requires:

• A deep understanding of how different processes interact.
  
  
• Extensive time and resources for analysis.
  
  
• Alignment across cross-functional teams.

Without a clear roadmap, organisations may struggle to integrate resilience across all business units, leading to gaps in implementation.

How to Overcome It:

• Conduct a detailed Business Impact Analysis (BIA) to identify interdependencies.
  
  
• Develop a centralized framework for process mapping.
  
  
• Leverage automation tools to streamline data collection and risk assessment.

Siloed Organisational Structures and Resistance to Change

In many financial institutions—especially in the Indian context—departments often operate in silos, with limited collaboration. This creates hurdles when implementing a unified operational resilience strategy.

Additionally, resistance from employees is common. Many view operational resilience as another compliance requirement rather than a strategic necessity. This mindset can result in minimal engagement and half-hearted execution.

How to Overcome It:

• Establish cross-functional working groups to foster collaboration.
  
  
• Communicate the value of operational resilience beyond compliance.
  
  
• Involve key stakeholders in decision-making to increase ownership and buy-in.

Resource Constraints: Budget and Skilled Workforce

Operational resilience demands investment in:

• Specialized personnel who understand resilience frameworks.
  
  
• Technology and tools for monitoring, reporting, and analysis.
  
  
• Training programs to build internal capabilities.

However, many organisations face budget limitations, making it difficult to allocate sufficient resources. Without the right expertise and funding, implementation efforts can stall or fail.

How to Overcome It:

• Secure Board-level commitment for adequate funding.
  
  
• Train existing employees instead of hiring external specialists.
  
  
• Prioritize high-impact areas for phased implementation.

Data Management Challenges

Data is critical for risk assessment, scenario testing, or reporting in operational resilience. However, organisations often struggle with:

• Poor data quality—incomplete, outdated, or inconsistent records.
  
  
• Lack of automation, leads to manual errors and inefficiencies.
  
  
• Data privacy concerns, especially while assessing third-party risks.

Without accurate and timely data, resilience planning can be flawed.

How to Overcome It:

• Implement automated data collection and reporting tools.
  
  
• Ensure data governance frameworks comply with regulatory norms.
  
  
• Regularly audit data quality to maintain reliability.

Cultural Resistance to Change

Operational resilience must be embedded in the organisational culture for it to be effective. However, many employees and leadership teams view it as just another compliance checkbox rather than a strategic priority.

This mindset leads to:

• Minimal engagement in resilience initiatives.
  
  
• Reluctance to adopt new processes.
  
  
• Poor participation in training and scenario exercises.

How to Overcome It:

• Foster a resilience-first culture by linking resilience to business success.
  
  
• Use real-life case studies to demonstrate the impact of disruptions.
  
  
• Recognize and reward teams that actively contribute to resilience efforts.

Summing Up for Part 6 ...

While the challenges in implementing RBI’s operational resilience framework are significant, they are not insurmountable. organisations that approach resilience as a strategic initiative—rather than just a compliance exercise—will be better positioned to navigate disruptions efficiently and effectively.

By breaking silos, securing resources, enhancing data management, and fostering a resilience-driven culture, financial institutions can transform regulatory compliance into a competitive advantage.

Dr Goh Moh Heng, President of BCM Institute, summarises this webinar. If you have any questions, please speak to the author.