Reserve Bank of New Zealand Eases Proposed Policy Alterations for Outsourcing Services used by Banks

The Reserve Bank of New Zealand is looking at relaxing the policy changes which it plans to impose on banks which outsource their services. The change in attitude came after the lenders warned the Reserve Bank of the associated higher costs.

Now the Reserve Bank is asking for submissions or feedback on the changes that have been proposed for rules regarding outsourcing of services by registered banks. The new rules will help the central bank to firmly define the functions that should be covered by the outsourcing policy along with the time when the policy will start.

According to the Reserve Bank the feedback submitters were more or less comfortable with the proposals objectives by the RBNZ but the lenders were not too delighted with the policies low threshold along with the embargo on some of the functions which are being outsourced under the new materiality threshold.

In a new consultation document the Reserve Bank said "A number of banks provided cost estimates and some have indicated that the cost implication of the proposals was too high. The cost estimates ranged from $10 million to $400 million."