Regulatory Alerts2018-10-07
Bank of Israel Directive 359A on Outsourcing
The Bank of Israel issued Proper Conduct of Banking Business Directive No. 359A to establish comprehensive principles for banking corporations managing outsourcing risks. The regulation mandates strict corporate governance, requiring Board approval of outsourcing policies and senior management oversight, while prohibiting the outsourcing of core decision-making functions like loan underwriting. It further imposes rigorous due diligence, contractual safeguards, and mandatory reporting requirements for material activities to ensure regulatory compliance and customer protection.
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