Outsourcing carries risks of reliance on single vendor: RBI Deputy Governor Rao

RBI Deputy Governor M Rajeshwar Rao highlighted third-party dependence risks, referencing the Microsoft outage. He noted vendor lock-in, cybersecurity, and RBI norms. A study revealed LSPs' grievance mechanism gaps, risking supervisory actions. Rao raised issues of transparency, slow responses, misleading practices, hidden fees, and challenges in closing accounts, emphasizing the need for quick adaptability.