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FSSAI Verification For Food Businesses: Complete Guide

Introduction To FSSAI Verification And Its Importance For Food Businesses

The Food Safety and Standards Authority of India (FSSAI) is the regulatory body responsible for ensuring the safety and quality of food products in India. Established under the Food Safety and Standards Act, 2006, FSSAI is critical in maintaining food safety standards, implementing laws, and regulating the food industry. It ensures that food businesses adhere to health and hygiene protocols, ultimately protecting public health.

For any food business in India, whether you’re involved in food production, distribution, or retailing, obtaining FSSAI registration or a license is an essential step towards gaining the trust of your customers. FSSAI certification is considered a mark of credibility, confirming that your business meets the stringent food safety standards the government sets.

The FSSAI verification process involves two key stages: first-time registration and ongoing compliance. While registering for FSSAI for the first time may seem daunting, ongoing compliance ensures that businesses meet food safety standards even after obtaining the initial certification. Neglecting these regulations can lead to hefty penalties and, in some cases, business shutdowns.

This guide will walk you through the step-by-step process of obtaining an FSSAI registration or license, ongoing compliance measures, and everything you need to know to ensure your food business adheres to the FSSAI’s stringent requirements.

Types Of FSSAI Licenses And Registration

FSSAI offers three license categories depending on a food business’s size, nature, and turnover. It’s important to understand which category your business falls into because the registration or licensing process and the associated requirements vary accordingly.

1. FSSAI Registration for Small Food Businesses (Basic Registration)

For small food businesses with an annual turnover of up to ₹12 lakh, the FSSAI provides a Basic Registration. This registration type is ideal for small-scale operators like food vendors, small eateries, and low-scale food processors. The process is more straightforward and quicker than obtaining a license, making it the entry-level certification for food businesses in India.

2. FSSAI State License

The State License is required for medium-sized food businesses with an annual turnover ranging from ₹12 lakh to ₹20 crore. It applies to companies that handle larger operations, such as manufacturing units, large restaurants, and wholesale food suppliers. This license type ensures that food businesses adhere to specific state-level regulations, with the state food safety department taking the lead in inspection and monitoring.

3. FSSAI Central License

Businesses with an annual turnover exceeding ₹20 crore, or those operating across multiple states, must apply for a Central License. This license applies to large manufacturers, importers, exporters, and large-scale food businesses that must comply with national regulations. The FSSAI’s Central Licensing Authority governs the issuance of this license and conducts inspections to ensure food safety standards are met across regions.

How To Apply For FSSAI Registration And License

Applying for FSSAI registration or a license is a straightforward process. Below, we outline the step-by-step process for first-time registration and applying for State or Central licenses.

1. Basic Registration Process (For Small Businesses)

Suppose your food business falls under the Basic Registration category. In that case, the process is relatively simple and can be done online through the official FSSAI website or the FSSAI Food Safety Compliance System (FoSCoS) platform. Here’s how:

Create an Account on FoSCoS: Visit the official FSSAI website and create an account on FoSCoS. Fill in your business details, including the type of business, address, and nature of food products.
Provide Documentation: For basic registration, you will need to submit minimal documentation, such as:
- A photo ID proof of the business owner
- Proof of business address
- Details about the food safety supervisor (if applicable)
Submit Application: After completing the details and uploading the necessary documents, submit your application for review. The FSSAI will process the application and grant the registration, typically within 7 days.
Receive Registration Number: Once approved, you will receive your FSSAI registration number. Display this number on your food products or packaging.

2. State and Central License Application Process

For businesses that require a State License or a Central License, the process is more detailed and involves more documentation. Here’s how to apply:

Create an Account on FoSCoS: Just like the basic registration, create an account on the FoSCoS platform. However, in this case, you must select either the State or Central License option, depending on your business’s turnover and nature.
Fill in the Application Form: Complete the application form with detailed business information, including:
- Food category and description of the food products manufactured or sold
- Details of the manufacturing unit, if applicable
- Proof of business address
- List of equipment used in food processing or packaging
Submit Supporting Documents: You will need to provide additional documents for State or Central licenses, such as:
- Food safety management system certification (e.g., ISO 22000, HACCP)
- Details of food safety supervisors
- Plant layout and process flow chart
- Proof of ownership or rental agreement of the business premises
- No objection certificate (if required)
Inspection and Verification: After the application is submitted, an FSSAI inspector will visit your facility to verify the information provided and ensure that it complies with the standards set by FSSAI. The inspection focuses on food hygiene, quality control, and safety protocols.
Receive License Number: Once your business passes the inspection and all documents are verified, you will receive your FSSAI license number, which must be displayed on food products and packaging.

3. Important Considerations for FSSAI Application

Accuracy is Key: Ensure that all the details in your application are accurate and match the supporting documents. Any discrepancies could delay the approval process or lead to rejection.
Timely Renewal: FSSAI registrations and licenses must be renewed before expiry. Renewal applications should be submitted 30 days before the current registration/license expires.
Additional Certifications: Depending on the type of food business and the scope of operations, you may be required to apply for additional certifications such as organic certification, halal certification, or export/import certifications.

Ongoing FSSAI Compliance For Food Businesses

The responsibility doesn’t end there once your food business has successfully registered or obtained its FSSAI license. FSSAI compliance is an ongoing requirement to ensure that companies continue to meet the safety, hygiene, and quality standards mandated by the FSSAI. Regular adherence to these standards is essential to maintaining your registration/license and avoiding penalties or shutdowns.

1. Maintaining Food Safety Standards

FSSAI sets stringent guidelines for food safety management that businesses must adhere to consistently. These include:

Hygiene and Sanitation: Ensure your premises, staff, and equipment are always clean and hygienic. This includes regularly cleaning manufacturing units, storage areas, and transport vehicles. Proper waste disposal and pest control measures should also be in place.
Quality Control Measures: Implement strict quality control systems to ensure food products meet safety standards. This involves monitoring the raw materials used, testing the products at different stages of production, and maintaining proper storage conditions.
Food Safety Management Systems (FSMS): Many businesses are required to implement an FSMS. Systems such as HACCP (Hazard Analysis Critical Control Point) or ISO 22000 help businesses identify potential hazards, prevent contamination, and improve food safety.

2. Regular Inspections and Audits

FSSAI conducts periodic inspections of food businesses to ensure they comply with food safety standards. Companies should be prepared for both scheduled and surprise inspections. The inspections typically cover:

Compliance with food hygiene regulations
Adequate documentation of food safety measures
Labelling of food products (ensuring accurate nutritional information and expiry dates)
Traceability systems to track raw materials, production processes, and final products.

During an inspection, the FSSAI inspector will also assess whether the business complies with any additional standards, including those set by international food safety organisations (such as HACCP).

3. Reporting and Record Keeping

Maintaining thorough records is an integral part of ongoing FSSAI compliance. These records include:

Daily production logs: Track the quantity, type, and details of food produced.
Supplier details: Maintain records of raw materials and packaging suppliers, ensuring they also meet FSSAI compliance standards.
Inspection and audit reports: Keep copies of previous inspections, internal audits, and any corrective actions taken.
Employee training records: Document the food safety training sessions provided to staff, which should be conducted regularly to ensure all employees are up-to-date with food safety practices.

Failure to maintain adequate records can result in penalties, fines, or revocation of your FSSAI license.

4. Renewal and Updates

FSSAI registrations and licenses are not permanent; they must be renewed periodically to ensure continued compliance. Here’s what you need to know:

Renewal Timeline: You must submit your renewal application at least 30 days before your registration or license expires.
Updating Business Information: If any changes in your business operations, such as a change in ownership, address, or the nature of your business, these changes must be reported to FSSAI and updated in your license.

It’s crucial to keep track of the expiration date of your license and begin the renewal process well in advance to avoid any registration lapses.

5. Labelling and Packaging Compliance

FSSAI requires that food products meet specific labelling and packaging standards. Businesses must ensure that:

Product labels mention the FSSAI registration or license number.
Nutritional information, including ingredients, allergens, and calorie count, is accurate and easy to understand.
Best-before or expiry dates are displayed as per FSSAI guidelines.
Manufacturing and batch numbers are included to ensure product traceability in case of a recall.

Non-compliance with labelling regulations can result in fines or the confiscation of goods.

Penalties For Non-Compliance With FSSAI Regulations

While obtaining FSSAI registration or a license is a crucial step for food businesses, it is equally essential to maintain continuous compliance with FSSAI regulations. Failing to adhere to these standards can lead to serious consequences, including hefty penalties, fines, and even the suspension or cancellation of your FSSAI registration or license. Below are some common penalties that food businesses in India may face for non-compliance with FSSAI regulations.

1. Monetary Fines and Penalties

FSSAI imposes monetary penalties for a wide range of non-compliance issues, including:

Failure to Obtain Registration or License: If your food business operates without the necessary registration or license, you may be subject to a fine of up to ₹5 lakh.
Failure to Maintain Hygiene and Safety Standards: Any violation of hygiene, sanitation, or food safety regulations can lead to fines ranging from ₹25,000 to ₹5 lakh, depending on the severity of the breach.
Incorrect Labelling or Misleading Claims: If food products are found to have incorrect labelling, including misleading claims about nutritional content, allergens, or expiry dates, fines of up to ₹5 lakh may be imposed. Repeated offences can lead to more severe penalties.

2. Suspension or Revocation of FSSAI License

In cases of severe violations, FSSAI has the authority to suspend or revoke the registration or license of a food business. Reasons for suspension or revocation include:

Failure to Comply with Inspection Requirements: If your food business fails to comply with the mandatory inspections or does not take corrective actions when required, FSSAI may suspend or revoke your license.
Repeated Violations: Businesses that repeatedly fail to comply with FSSAI regulations, even after warnings and fines, may have their registration or license permanently revoked.
Contamination or Unsafe Food Products: In cases where a food business produces or distributes unsafe food products that pose a risk to public health, FSSAI can revoke the license to protect consumers.

3. Imprisonment for Serious Offences

In certain circumstances, food business operators may face criminal charges under the Food Safety and Standards Act, 2006. Serious violations that could result in imprisonment include:

Selling Contaminated or Substandard Food: Selling food that is contaminated, adulterated, or not fit for consumption can lead to imprisonment for up to 6 months for the first offence, with the possibility of a fine of up to ₹5 lakh. Subsequent violations can result in a jail term of up to 1 year.
Selling Misbranded or Misleading Food Products: Businesses found guilty of selling food for sale with false or misleading information can face imprisonment of up to 1 year, along with a fine of up to ₹3 lakh.

4. Compensation to Affected Consumers

In cases where non-compliance harms or injures consumers, the food business may be required to compensate affected individuals. For instance, if contaminated food causes foodborne illnesses, the company may be required to pay medical expenses, lost wages, and other related costs.

5. Seizure of Goods

FSSAI also has the authority to seize food products that do not comply with food safety standards. This includes:

Contaminated or Unsafe Food Products: Products not meeting the safety requirements can be seized and destroyed.
Products with Incorrect Labels: Food products with misleading or incorrect labelling may be confiscated, especially if they mislead consumers about ingredients, allergens, or nutritional information.

How To Avoid Penalties And Maintain FSSAI Compliance

The best way to avoid penalties and maintain compliance with FSSAI regulations is to:

Regularly review food safety standards and ensure your business meets the latest FSSAI requirements.
Conduct internal audits to verify that your records, hygiene practices, and safety systems are current.
Provide staff training on food safety, hygiene practices, and regulations.
Stay updated with FSSAI notifications and any changes to the law that might affect your business.
Implement a strong FSMS (Food Safety Management System) like HACCP to prevent safety breaches.

Resources And Important Links For FSSAI Compliance

Staying informed and current with the latest FSSAI regulations is crucial for any food business in India. FSSAI provides a range of official resources that food businesses can refer to for guidance, updates, and compliance assistance. These resources are invaluable for ensuring that your company adheres to food safety standards and remains in good standing with the regulatory authorities.

1. Official FSSAI Website

The FSSAI website is the primary source for all regulatory information related to food safety in India. It provides detailed guides, notices, and instructions for food businesses on obtaining registration, complying with regulations, and renewing licenses. You can access the website here:
www.fssai.gov.in.

Some of the essential sections of the FSSAI website include:

Food Safety and Standards Regulations: A complete list of all food safety regulations, rules, and guidelines for food businesses.
Food Safety and Standards Regulations
Licensing and Registration: A dedicated section for food business owners to learn about the different types of licenses and how to apply for them.
Licensing and Registration
Inspection Matrices: Guidelines for inspections and the standards that food businesses must meet to ensure compliance.
Inspection Matrices
Food Safety Display Boards: Regulations regarding the display of food safety information in food businesses.
Food Safety Display Boards

2. FSSAI Food Safety Compliance System (FoSCoS)

FoSCoS is the online platform FSSAI provides for the registration, licensing, and compliance monitoring of food businesses in India. This system allows businesses to apply for registration or licenses, track the status of applications, and maintain their compliance records online. The platform is user-friendly and helps streamline the regulatory process.

To access FoSCoS, visit:
www.fssai.gov.in/foscos

3. FSSAI Compendium of Licensing Regulations

FSSAI regularly updates its Compendium of Licensing Regulations to provide businesses with the most current rules and regulations regarding food safety. This document is an essential resource for food business owners to understand their obligations and ensure they comply.

You can download the latest Compendium of Licensing Regulations from:
FSSAI Compendium of Licensing Regulations

4. Training and Certification Programs

FSSAI offers various training and certification programs for food business operators to ensure they have the necessary knowledge and skills to maintain compliance. These programs are aimed at both food safety supervisors and business owners.

The training programs cover food safety management, hygiene practices, quality control, and legal requirements. These certifications are often required for businesses involved in food processing and handling.

Visit the FSSAI website for more information on training and certification:
Training Programs

5. FSSAI Helpline and Support

FSSAI provides a helpline for businesses seeking assistance with registration, compliance, and other regulatory matters. This support can be invaluable when navigating complex food safety standards or needing clarification on specific regulations.

Contact FSSAI at:

Helpline: 1800-11-2080 (Toll-free)
Email: info@fssai.gov.in

Conclusion

FSSAI compliance is a critical element in the success and sustainability of food businesses in India. Understanding the regulatory requirements, applying for the correct licenses, and ensuring ongoing compliance are all vital steps to maintaining food safety and building consumer trust. By following the guidelines set by FSSAI and utilising the resources available, food businesses can not only avoid penalties but also foster a reputation for delivering safe, high-quality food products to consumers.

By Abhinandan, 2 weeksAugust 14, 2025 ago

BFSI

What Is Vendor Risk Management (VRM)?

Vendor Risk Management is the process of identifying, assessing, and mitigating the risks associated with third-party vendors or suppliers. These vendors might provide critical services, software, or products to your organisation, but they can also introduce risks if their operations, systems, or processes are not up to standard.

These vendor risks can include security vulnerabilities, compliance failures, operational inefficiencies, and financial instability, which could ultimately lead to reputational damage, regulatory penalties, or financial loss. As businesses increasingly depend on third-party vendors, managing these risks proactively is more important than ever.

Effective VRM not only helps businesses mitigate the risks posed by external partners but also ensures compliance with industry regulations, protects sensitive data, and safeguards the overall business strategy.

How To Choose A Vendor Risk Management Tool?

Selecting the right Vendor Risk Management tool is highly important to effectively managing your third-party risks. To ensure that the solution you choose aligns with your business’s risk management objectives, consider the following factors:

Risk Identification and Assessment: Does the tool help you identify and assess a broad range of risks, including cybersecurity risks, compliance failures, operational disruptions, and financial stability?
Automation and Reporting: Look for tools that automate the risk assessment process, reduce manual effort, and provide insightful reports and analytics to help you make informed decisions.
Integration Capabilities: The VRM tool should integrate seamlessly with your existing systems, such as procurement, compliance, and security platforms, to centralise your risk management efforts.
Scalability: As your business grows, so should your VRM tool. Ensure the platform can scale to accommodate an increasing number of vendors and more complex risk management needs.
Compliance Management: A good VRM tool should assist with ensuring that your vendors comply with industry standards and regulatory requirements. This is especially critical for industries like finance, healthcare, and technology.
User Experience: The platform should be easy to navigate, with an intuitive user interface that makes it simple for teams to manage vendor risk assessments and monitor vendor performance.

7 Best Vendor Risk Management Tools

Based on these criteria, we’ve compiled a list of the top 7 Vendor Risk Management tools (in no particular order) that businesses can leverage to streamline their third-party risk management strategies.

1. AuthBridge: Third-Party Risk Management Solution

AuthBridge is one of the leading providers of comprehensive Vendor Risk Management solutions in India. With a robust background verification process and a focus on compliance and security, AuthBridge is designed to help businesses identify, assess, and mitigate risks associated with third-party vendors before they become problematic.

Key Features and Offerings

Comprehensive Vendor Risk Assessment: AuthBridge offers a thorough vendor due diligence process, covering various risk factors such as financial health, compliance status, security practices, and past performance.
Real-Time Risk Monitoring: AuthBridge provides continuous monitoring of vendors to ensure that any emerging risks are flagged immediately, helping businesses stay proactive in managing vendor relationships.
Regulatory Compliance Support: AuthBridge ensures vendors meet critical regulatory requirements like KYC (Know Your Customer), AML (Anti-Money Laundering), and data protection laws, helping your business avoid compliance risks.
Advanced Risk Scoring and Analytics: The platform allows businesses to evaluate vendors based on risk scores, derived from in-depth assessments of key risk indicators. Dashboards provide easy-to-understand insights that help in decision-making.
Customised Vendor Risk Solutions: Whether you need financial checks, criminal background screenings, or business health evaluations, AuthBridge tailors its services to suit the specific needs of your organisation.

They stand out as one of the top Vendor Risk Management tools because of their all-encompassing approach to vendor risk. Its detailed due diligence process, continuous monitoring, and regulatory compliance features ensure that businesses mitigate third-party risks effectively and maintain a secure business ecosystem.

2. UpGuard

UpGuard provides cybersecurity ratings, security assessment questionnaires, and threat intelligence capabilities to give businesses a full view of their risk surface. By using UpGuard, organisations can evaluate and continuously monitor their vendors’ security practices and identify vulnerabilities that could pose potential risks.

3. OneTrust

OneTrust’s Vendor Risk Management solution helps businesses automate vendor risk assessments, monitor ongoing compliance, and manage incidents. The platform integrates seamlessly with other OneTrust offerings to provide a complete compliance management solution, making it easier to mitigate vendor-related risks.

4. LogicGate

LogicGate helps businesses manage third-party risks with its configurable platform that enables customised workflows, risk scoring, compliance tracking, and vendor performance monitoring. This flexibility allows organisations to tailor the system to their unique needs, ensuring an optimal risk management strategy.

5. Prevalent

Prevalent offers a complete vendor risk management solution that includes automated vendor onboarding, continuous monitoring, risk assessments, and remediation tracking. This comprehensive platform helps businesses mitigate risks, ensuring that third-party relationships are secure and compliant.

6. Vanta

Vanta focuses on AI-powered security reviews, continuous vendor monitoring, and proactive risk management. Vanta enables organisations to automatically detect and evaluate potential risks associated with their third-party vendors and take immediate action when necessary.

7. Panorays

Panorays automates the security risk assessments of vendors and provides continuous monitoring to ensure vendors comply with the necessary security protocols. The platform delivers actionable insights and recommendations to mitigate security risks and ensure that vendors are securely integrated into the organisation’s ecosystem.

Conclusion

Effective Vendor Risk Management is crucial for businesses looking to secure their operations while working with third-party vendors. The tools listed above can help businesses mitigate the risks associated with vendor relationships by offering a variety of features, including continuous monitoring, regulatory compliance support, and real-time risk assessments.

By Abhinandan, 1 monthJuly 31, 2025 ago

Blogs

Why Verify GST Returns & Bank Statements In Third-Party Onboarding?

Introduction

Onboarding third-party vendors, suppliers, or distributors is an important aspect of business operations, particularly in sectors such as e-commerce, manufacturing, and retail. As a business expands its supply chain or distribution network, ensuring that these third parties comply with all financial and regulatory requirements becomes a thing of extreme importance.

Verifying GST returns and bank statements during the onboarding process plays a key role in mitigating financial risks and ensuring business integrity. These documents not only help in verifying the third party’s legitimacy but also ensure compliance with national regulations.

Understanding GST Returns

What are GST Returns?

GST returns are filed by businesses to report their sales, purchases, tax collected, and tax paid to the government under the Goods and Services Tax (GST) Act in India. There are different types of GST returns, each serving a specific purpose:

GSTR-1: Reports all outward supplies (sales).
GSTR-3B: A summary return filed monthly or quarterly, reporting tax liability and paid taxes.
GSTR-9: An annual return consolidating all transactions during the year.
GSTR-2A/2B: A self-generated return reflecting purchases and input tax credits available.

Why Verifying GST Returns Is Crucial During Onboarding

Tax Compliance Check: Verifying a third party’s GST returns ensures that they are fulfilling their tax obligations.
Input Tax Credit (ITC) Verification: By examining the GST returns, businesses can verify whether a third party is eligible for input tax credits, which can have a direct impact on the cost structure, especially in B2B transactions.
Identifying Non-Compliance Risks: Non-compliant vendors or suppliers might have discrepancies in their GST filings. Verifying GST returns helps identify any potential tax evasion or fraud.

For example, a manufacturing unit may onboard a new supplier. Verifying the supplier’s GST returns ensures that the supplier is adhering to tax laws, which ultimately impacts the pricing and credit claims for the buyer. If the supplier is not compliant, the buyer could face penalties or loss of input tax credits.

What Are Bank Statements?

A bank statement is a detailed record of all financial transactions that have taken place in a company’s bank account during a given period. This document lists both incoming and outgoing payments, including transactions with clients, suppliers, and employees.

Key Components Of A Bank Statement:

Deposits (Receipts): Payments received from customers or other sources.
Withdrawals (Expenditures): Payments made to suppliers, employees, or for other business expenses.
Closing Balance: The final balance in the account at the end of the period.

Why Verifying Bank Statements Is A Must In Third-Party Onboarding:

Financial Health Assessment: By verifying bank statements, businesses can assess the financial stability of their vendors or suppliers. A supplier who regularly faces overdraft charges or delayed payments may indicate financial instability.
Tracking Transaction Accuracy: Verifying bank statements ensures that the payments made to vendors match the amounts invoiced. Discrepancies here may highlight potential fraud or operational inefficiencies.
Ensuring Authenticity: Third-party vendors or suppliers who cannot provide clean, consistent bank statements may indicate that their financial operations are not well-managed, posing a risk to business relationships.

For example, a logistics company onboarding a new distribution partner can verify the partner’s bank statements to ensure that the partner’s financial transactions are transparent and the payment history aligns with the company’s invoicing practices. Discrepancies here could be a red flag for potential payment issues or financial instability.

GST Returns vs Bank Statements: Key Differences And Similarities

Aspect	GST Returns	Bank Statements
Purpose	Verifies tax compliance and eligibility for input tax credits	Reflects the actual flow of cash, demonstrating financial health
Frequency	Monthly/Quarterly/Annually (depends on the type of return)	Typically monthly
Issued By	Government of India (GST portal)	Banks or financial institutions
Data Reflected	Sales, purchases, tax collected and paid	Deposits, withdrawals, bank charges, balances
Legal Requirement	Mandatory for businesses registered under GST	Not mandatory, but essential for business financial health
Key Insights	Tax liabilities, GST credits, tax paid	Cash flow, financial stability, and payment history

Why Verifying GST Returns & Bank Statements Is Important For Compliance

Compliance is at the heart of successful third-party onboarding, especially in India, where regulations are strict, and penalties for non-compliance can be very harsh.

Preventing Fraud and Evasion: Both GST returns and bank statements help identify discrepancies that could point to fraudulent activity, such as incorrect reporting of tax liabilities or irregular financial transactions.
Ensuring Transparency and Integrity: When businesses verify both GST returns and bank statements, they ensure the third-party vendor or supplier is operating within legal frameworks. This reduces the likelihood of engaging with entities involved in tax evasion or financial misconduct.
Minimising Risk in the Supply Chain: By conducting a thorough verification process, businesses can minimise risks in their supply chain, ensuring they are not unknowingly partnering with unreliable or non-compliant entities.

How Third-Party Onboarders Can Leverage GST And Bank Statement Verification

Third-party onboarding professionals in India can use these verification processes to ensure that vendors, suppliers, or distributors meet the required standards of financial and tax compliance.

Step 1: Collect GST Returns and Bank Statements:
Ensure that all third-party vendors provide these key documents, ensuring they are complete, accurate, and up-to-date.
Step 2: Cross-Check GST Returns for Compliance:
Verify the GST registration status, check for matching sales and purchases, and ensure the vendor has paid the required taxes.
Step 3: Examine Bank Statements for Financial Stability:
Look for consistent payments and receipts, and confirm there are no major discrepancies or signs of financial mismanagement.
Step 4: Conduct Risk Assessment:
Using these documents, perform a risk assessment to determine the financial and operational health of the third party.

Conclusion

In India, verifying GST returns and bank statements is not just about adhering to tax regulations. It is a key practice to ensure that the third-party vendors, suppliers, or distributors you onboard are financially stable, trustworthy, and compliant with the law. This process significantly reduces the risk of fraud, tax evasion, and financial instability that can lead to reputational damage or operational disruptions.

For businesses looking to onboard third parties in India, the importance of these documents cannot be overstated. They play a critical role in protecting the integrity of your supply chain and ensuring your compliance with India’s ever-evolving regulatory landscape.

By Abhinandan, 2 monthsJuly 10, 2025 ago

Manufacturing

13 Best Third-Party Risk Management Software In 2024

As businesses become more and more interconnected, effectively managing third-party risks has become extremely important to protecting operations and ensuring compliance with various regulations. Third-party risk management (TPRM) software is an important tool in this effort, enabling organisations to assess, monitor, and mitigate the risks associated with their vendors, suppliers, and external partners.

Top 13 Third-Party Risk Management (TPRM) Softwares In India

Whether your organisation requires TPRM software designed for large enterprises, solutions with AI-driven capabilities, or platforms that emphasise regulatory compliance, several leading providers offer robust options. Below, we explore the 13 most effective TPRM software solutions in 2024, in no particular order:

1. AuthBridge

AuthBridge offers a comprehensive Third-Party Risk Management (TPRM) solution designed to help businesses manage, monitor, and mitigate risks associated with their third-party relationships. The solution is built on advanced technology and provides a robust framework for businesses to ensure compliance, reduce vulnerabilities, and protect their reputation.

End-to-End Risk Management

Holistic Risk Assessment: AuthBridge provides a full-spectrum assessment of third-party risks, covering financial, legal, regulatory, operational, and reputational areas. This allows businesses to gain a complete understanding of their third-party entities.
Supply Chain Due Diligence: Ensures continuous due diligence throughout the entire relationship with third parties, not just at the onboarding stage, helping identify and mitigate risks over time.

Compliance and Regulatory Assurance

Comprehensive Compliance Checks: Detailed checks against local and international regulations, including Anti-Money Laundering laws, and data protection standards like the DPDP Act, and GDPR, are conducted to ensure full compliance.
Audit-Ready Documentation: The platform provides the necessary documentation and reports to demonstrate compliance during audits, reducing the risk of regulatory penalties.

Continuous Monitoring and Alerts

Real-Time Monitoring: Continuous monitoring of third-party entities with real-time alerts on any changes in their status or risk profile helps businesses stay ahead of potential risks.
Automated Red Flag Alerts: The system includes automated alerts that flag suspicious activities or non-compliance issues, enabling immediate corrective actions.

Technology-Driven Insights

AI-Powered Risk Analysis: Leveraging AI and machine learning to analyse large data sets, AuthBridge identifies patterns and anomalies that may indicate potential risks, enabling data-driven decision-making.
Customisable Dashboards: The platform offers customisable dashboards for a clear overview of the third-party risk landscape, aiding quick decisions and efficient management.

Third-Party Screening and Verification

Thorough Background Screening: Extensive background checks on third-party entities, including verification of legal standing, financial health, and overall reputation, ensure credible and reliable partnerships.
Global Watchlist Screening: The solution includes screening against global sanctions, watchlists, and adverse media to prevent engagements with entities involved in illegal or unethical activities.

Risk Scoring and Prioritisation

Dynamic Risk Scoring Models: Risk scores are assigned to third-party entities based on various factors, dynamically updated as new information becomes available, helping prioritise and address high-risk relationships.
Risk Mitigation Prioritisation: The solution assists in prioritising risk mitigation efforts based on risk scores, ensuring that resources are allocated effectively to manage the most critical risks.

Efficient Onboarding and Contract Management

Streamlined Onboarding: The onboarding process for third-party vendors is automated, reducing the time and effort required while ensuring necessary due diligence before contract signing.
Contract Lifecycle Management: Tools for managing the entire lifecycle of third-party contracts, from initiation to renewal or termination, ensure risks are managed at every stage of the relationship.

Industry-Specific Solutions

Tailored TPRM: Industry-specific TPRM solutions address unique risks faced by different sectors like BFSI, healthcare, manufacturing, and IT/ITES, ensuring relevant and actionable insights.

Data Privacy and Security

Secure Data Handling: Ensures all data processed is handled securely with encryption and other advanced security measures to protect sensitive information from unauthorized access.
Data Protection Compliance: Designed to comply with global data protection regulations by being ISO/IEC 27001:2013 and SOC 2 Type II Certified, maintaining the highest standards of data privacy.

2. UpGuard

UpGuard is a robust third-party risk management software known for its comprehensive risk assessment capabilities. It categorises risks into six key areas: email security, website risks, phishing and malware, network security, brand protection, and reputation risk. UpGuard’s TPRM software is especially valuable for its pre-built questionnaires and libraries, which accelerate vendor assessments and improve third-party security postures. With a user-friendly interface and frequent updates, UpGuard is an excellent choice for businesses of all sizes looking for reliable TPRM software with automation and data privacy compliance features.

3. SecurityScorecard

SecurityScorecard excels in providing continuous security ratings across ten categories, making it a top TPRM provider for businesses needing comprehensive cybersecurity risk management. This third-party risk assessment software offers automated action plans to improve security scores, and its tools for compliance management and breach insights are indispensable for organisations prioritising regulatory compliance. SecurityScorecard is a versatile solution, suitable for small businesses and large enterprises alike, offering proactive risk mitigation and seamless compliance management.

4. BitSight

BitSight’s TPRM software leverages advanced algorithms and daily security assessments to minimise risks associated with third-party vendors. The platform’s continually updated Security Ratings provide a solid, data-driven foundation for evaluating and managing third-party risks. With features like automated vendor onboarding and data-driven validation of vendor responses, BitSight ensures that companies can make informed decisions. This makes it one of the best TPRM solutions for organisations looking for a blend of efficiency, accuracy, and continuous monitoring.

5. OneTrust

OneTrust’s TPRM software is tailored for businesses needing to adhere to strict data privacy and regulatory compliance standards, such as GDPR and HIPAA. The platform offers tools for data inventory mapping, privacy impact assessments, and automated workflows, all accessible through an intuitive web portal. While its advanced analytics and risk mitigation tools could be stronger, OneTrust remains a top choice for organisations that prioritise data privacy compliance and regulatory adherence in their third-party risk management processes.

6. Prevalent

Prevalent’s TPRM platform offers a comprehensive solution for mitigating security and compliance risks throughout the vendor lifecycle. Ideal for larger organisations or mid-sized companies with dedicated TPRM resources, Prevalent excels in providing continuous risk monitoring, automated assessments, and detailed risk scoring. With its strong vendor intelligence networks and flexible, hybrid approach, Prevalent delivers tailored solutions that offer a rapid return on investment, making it one of the top TPRM providers in the market.

7. ProcessUnity

ProcessUnity’s Vendor Risk Management (VRM) software streamlines risk and compliance programs by automating vendor assessment, monitoring, and management. This platform is particularly effective for large enterprises that require robust TPRM software with risk scoring and continuous monitoring capabilities. ProcessUnity’s customisation options and integration with other governance, risk, and compliance (GRC) tools make it a powerful choice for organisations aiming to manage third-party risks effectively.

8. Centraleyes

Centraleyes offers a cloud-based TPRM solution designed for scalability and customisation, providing a comprehensive console for overseeing and assessing risks. With features like an advanced risk register, real-time alerts, and customisable dashboards, Centraleyes ensures that security teams are promptly informed of any vulnerabilities. As businesses evolve, Centraleyes plans to integrate AI to further enhance risk assessment and mitigation processes, making it a forward-thinking choice for companies seeking TPRM software with AI and automation features.

9. Diligent ThirdPartyBond

Diligent’s ThirdPartyBond stands out for its advanced risk analytics powered by machine learning algorithms. This TPRM software offers features like KPI and KRI-driven reports, centralized third-party inventory, and adaptive vendor surveys with advanced risk-scoring. Although the platform’s editing features primarily rely on scripting, which may be challenging for non-technical users, its capabilities in monitoring SLA performance and managing contracts make it a valuable tool for enterprises needing a sophisticated TPRM solution with regulatory compliance features.

10. Venminder

Venminder is a user-friendly SaaS solution for third-party risk management, offering tools for contract management, vendor onboarding, risk assessments, and due diligence. The platform’s customisable vendor questionnaires, SLA management, and vendor scorecard tracking ensure comprehensive oversight of vendor relationships. Venminder’s extensive library of learning resources and scalable services make it an adaptable solution for organisations of any size looking for TPRM software that simplifies risk management processes.

11. LogicGate

LogicGate’s Risk Cloud is a highly configurable platform that streamlines governance, risk, and compliance processes. Its drag-and-drop interface automates tasks like vendor onboarding and risk surveying, making it easy for businesses to manage third-party risks without needing extensive technical skills. The platform’s real-time visibility into the risk landscape, coupled with integration with tools like Jira and Slack, makes LogicGate a versatile option for enterprises seeking TPRM software that enhances decision-making through data-driven insights.

12. Archer

Archer Third-Party Governance offers powerful tools for managing and mitigating third-party risks, with customisable risk indicators and advanced visualization tools like Bowtie Diagrams. The platform’s AI-powered assessments and industry-specific design enable organisations to evaluate risks comprehensively and address potential disruptions proactively. Archer’s cloud-based deployment ensures scalability, making it a versatile TPRM software solution for organisations looking to enhance business resilience and streamline vendor risk management.

13. Panorays

Panorays is a leading TPRM platform that efficiently manages cybersecurity risks associated with third-party vendors. It offers AI-powered cybersecurity questionnaires, extended attack surface assessments, and continuous monitoring, providing a comprehensive view of vendor security postures. Panorays excels in regulatory compliance and quick risk alerts, making it a strong choice for businesses focused on enhancing cybersecurity resilience.

Conclusion

As businesses become more interconnected, effective Third-Party Risk Management (TPRM) is essential to safeguard operations, compliance, and reputation. The right TPRM software helps mitigate risks associated with vendors and partners, offering solutions from AI-driven insights to robust compliance tools. The best TPRM platforms integrate seamlessly with existing processes, enhance risk management, and scale with your business. By evaluating each option’s features and strengths, organisations can choose a solution that protects their operations and supports long-term resilience.

FAQs

What is TPRM?

Third-Party Risk Management (TPRM) is a process companies use to identify, assess, and manage risks posed by vendors and partners. It involves risk assessment, due diligence, ongoing monitoring, and mitigation planning to ensure third parties don’t expose the company to operational, reputational, regulatory, or security risks.

Is TPRM part of GRC?

Yes, Third-Party Risk Management (TPRM) is considered part of Governance, Risk, and Compliance (GRC). TPRM focuses specifically on identifying, assessing, and managing risks associated with third-party relationships, while GRC provides a broader framework for managing governance, risk, and compliance across an organization. Integrating TPRM within GRC enhances overall risk visibility and helps ensure that third-party risks align with the organization’s compliance and governance objectives.

What is an example of TPRM?

A practical example of Third-Party Risk Management (TPRM) is a company onboarding a background verification provider to streamline employee checks. Before partnering, the company evaluates the provider’s data security measures, compliance with privacy regulations (like GDPR), and incident response capabilities to ensure that employee data remains secure throughout the verification process. This due diligence mitigates potential risks related to data breaches, regulatory fines, and reputational damage.

Which is the most famous tool of risk management?

The most famous tool in risk management is the Risk Assessment Matrix (RAM), also known as the Risk Matrix. It is widely used to evaluate the likelihood and impact of risks, helping organizations prioritize and address potential threats effectively. By plotting risks based on probability and severity, it aids in decision-making and ensures focused mitigation strategies.

SWOT Analysis: Evaluates Strengths, Weaknesses, Opportunities, and Threats to understand both internal and external factors impacting a project or organization. It helps in identifying risks and strategic opportunities.
Failure Mode and Effects Analysis (FMEA): Used to identify potential points of failure in a process or system and assess the severity, likelihood, and detectability of each failure, allowing for proactive mitigation.
Monte Carlo Simulation: A quantitative method that uses probability distributions to model and predict a range of possible outcomes, helping in assessing risk under uncertainty.
Bowtie Analysis: Visualizes the pathways and barriers of risk events from causes to consequences, helping in understanding how to prevent and mitigate risks effectively.
Risk Registers: A structured log of identified risks, their likelihood, impact, and assigned mitigations, allowing for consistent monitoring and updating.
Root Cause Analysis (RCA): Focuses on identifying the underlying causes of a risk or problem, enabling effective resolution and prevention.

What is the TPRM strategy?

Third-Party Risk Management (TPRM) is a strategy focused on identifying, assessing, monitoring, and mitigating risks associated with an organisation’s third-party relationships. This includes risks from vendors, suppliers, contractors, and other external entities. The strategy involves due diligence processes, regular assessments, compliance checks, and monitoring mechanisms to ensure third-party activities align with the organisation’s security, legal, regulatory, and operational standards. A robust TPRM strategy helps organisations minimise exposure to operational disruptions, data breaches, regulatory violations, and reputational damage arising from third-party partnerships.

What are risk domains in TPRM?

In Third-Party Risk Management (TPRM), risk domains are the key areas where potential risks may arise from third-party relationships. Common risk domains include:

Financial Risk: The risk of third-party financial instability affecting service continuity.
Operational Risk: Risks related to operational failures, process disruptions, or supply chain issues.
Compliance and Regulatory Risk: Risks of non-compliance with laws and regulations, leading to penalties or legal issues.
Cybersecurity Risk: The risk of data breaches, cyber-attacks, and unauthorised data access.
Reputational Risk: Risks that negatively impact a company’s reputation due to third-party actions.
Strategic Risk: Risks arising from misaligned third-party strategies or goals affecting business objectives.
Environmental, Social, and Governance (ESG) Risk: Risks related to sustainability, ethical practices, and corporate governance.

What is TPRM framework?

The Third-Party Risk Management (TPRM) framework is a structured approach organisations use to identify, assess, manage, and mitigate risks associated with external vendors and partners. It involves evaluating potential risks these third parties may pose to the organisation’s operations, data, and reputation. The TPRM framework typically includes risk assessment, due diligence, continuous monitoring, and governance practices to ensure third-party relationships remain secure, compliant, and aligned with the organisation’s objectives.

By Abhinandan, 1 yearAugust 27, 2024 ago

Third Party Risk Management

Different Types of Third-Party Risks in Business

Introduction

Third-party risks are potential threats that arise from relying on external entities to conduct business operations. These risks can stem from vendors, suppliers, contractors, or any external collaborations that are integral to a company’s operations. As businesses increasingly outsource key services and integrate external partnerships into their core activities, the complexity and potential impact of third-party risks grow. Understanding these risks is crucial for developing effective risk management strategies and maintaining robust business operations.

Types of Third-Party Risks

Cybersecurity Risks

Cybersecurity risks are among the most critical concerns when dealing with third parties, given the potential for substantial financial and reputational damage resulting from data breaches or cyber-attacks. As businesses integrate more third-party services, the interfaces between different systems widen, increasing the attack surface for potential security threats.

Key Risk Factors:

Access Control: Third parties often require access to a company’s systems, which can inadvertently provide gateways for unauthorized access if not properly managed.
Data Handling and Storage: How third parties handle, store, and protect data is crucial. Inadequate data protection measures can lead to data leaks or breaches.
Compliance with Security Standards: Many industries have specific cybersecurity standards that third parties must adhere to, such as PCI DSS for payment processing or HIPAA for healthcare-related services.

Example: Consider a cloud service provider that stores sensitive customer data. If this provider suffers a data breach due to insufficient security practices, it not only exposes the business to data loss but also to regulatory penalties and loss of customer trust.

Table: Cybersecurity Risks Associated with Third Parties

Aspect	Potential Threat	Mitigation Approach
System Integration	Increased vulnerabilities at connection points	Implement robust encryption and firewall protections
Data Management	Risk of data theft or loss	Enforce data encryption and regular security audits
Regulatory Compliance	Non-compliance with industry standards	Continuous training and compliance monitoring

Compliance Risks

Compliance risks involve legal penalties, financial losses, or damage to reputation resulting from third parties failing to adhere to laws and regulations. These risks are particularly pronounced in sectors heavily regulated, such as finance, healthcare, and international trade.

Key Risk Factors:

Regulatory Changes: Rapid changes in regulations can catch third parties unprepared, affecting their compliance and, by extension, that of the business.
Global Operations: If third parties operate across multiple jurisdictions, ensuring compliance with all relevant local, national, and international laws becomes challenging.
Contractual Compliance: Ensuring that third parties adhere to their contractual obligations, including compliance with specific legal standards, is crucial.

Example: A multinational corporation using third-party vendors in different countries needs to ensure these vendors comply with both local labor laws and international human rights laws to avoid fines and reputational damage.

Table: Compliance Risk Scenarios for Third Parties

Legal Area	Risk Scenario	Prevention Strategy
Environmental Law	Non-compliance with waste disposal regulations	Regular audits and compliance training
Data Protection	Breach of data protection laws (GDPR, etc.)	Implement data governance frameworks
Contractual Obligations	Failure to meet specified service levels	Define clear contract terms with penalties

Operational Risks

Operational risks involve failures in day-to-day operations due to third-party actions or inactions. These risks can disrupt business operations, affect service delivery, and ultimately impact customer satisfaction and revenue.

Key Risk Factors:

Service Delivery: Dependency on third parties for critical services can lead to business disruptions if these parties fail to deliver as expected.
Quality Control: Inconsistent quality of goods or services from third parties can affect the overall product quality and brand reputation.
Supply Chain Disruptions: Third parties are integral to the supply chain, and any disruptions on their end—due to logistical issues, financial problems, or natural disasters—can have cascading effects on the business.

Example: An automotive manufacturer relies on a single supplier for a critical component. If the supplier faces a strike or factory shutdown, it could halt the manufacturer’s production line, leading to significant operational delays and financial losses.

Table: Operational Risk Management for Third Parties

Issue	Impact	Management Technique
Dependency on Key Suppliers	High risk if supplier fails	Develop multiple sources for critical components
Inconsistent Quality	Damage to product quality and customer trust	Implement stringent quality checks and regular audits
Supply Chain Vulnerability	Potential for significant operational disruptions	Establish a diversified supplier network and contingency plans

Financial Risks

Financial risks associated with third parties encompass several dimensions that can directly impact a company’s fiscal health. These risks are particularly concerning because they can lead to sudden and sometimes substantial financial losses.

Key Risk Factors:

Financial Instability: This involves scenarios where a third party may face solvency issues, impacting their ability to deliver goods or services. For example, if a key component supplier goes bankrupt, it can halt production lines and lead to lost revenue.
Currency Fluctuations: Companies dealing with international suppliers are exposed to the risk of fluctuating exchange rates, which can alter the cost structure unexpectedly and affect profitability.
Credit Risk: This occurs when a third party fails to meet their financial obligations, such as failing to repay debts or deliver services after receiving payment.

Detailed Mitigation Strategies:

Financial Due Diligence: Conduct thorough financial assessments of potential suppliers before engagement and periodic reviews thereafter to monitor their financial health.
Diversification: Reduce reliance on any single supplier, especially in critical areas, to spread financial risk.
Hedging: Employ financial hedging strategies to protect against significant currency fluctuations.

Table: Financial Risk Scenarios and Mitigation Techniques

Risk Type	Potential Impact	Mitigation Technique
Supplier Bankruptcy	Disruption in the supply chain	Establish alternative suppliers and contingency plans
Currency Volatility	Increased costs of imported goods/services	Use forward contracts and options to manage exchange rate risk
Credit Default	Losses due to non-payment	Secure credit insurance or payment guarantees

Reputational Risks

Reputational risks stem from actions or failures of third parties that could damage the public perception of a company. In the age of social media and instant news, reputational damage can spread quickly and have long-lasting effects.

Key Risk Factors:

Ethical Misconduct: Involvement in unethical practices such as environmental breaches or human rights violations can reflect poorly on a company.
Quality Issues: Delivering substandard products or services can lead to customer dissatisfaction and harm the company’s reputation.

Detailed Mitigation Strategies:

Rigorous Supplier Screening: Implement stringent screening processes to evaluate the ethical practices of potential third parties.
Regular Audits: Conduct regular audits to ensure suppliers adhere to contractual and ethical standards.
Crisis Management Plan: Develop a robust crisis management plan to quickly address and mitigate any potential reputational damage.

Table: Reputational Risk Management Approaches

Risk Type	Example Issue	Mitigation Approach
Ethical Misconduct	Use of child labour in manufacturing	Conduct unannounced audits, enforce penalties
Quality Issues	Recurrent defects in supplier-produced parts	Tighten quality control measures, adjust supplier selection criteria

Strategic Risks

Strategic risks arise when there’s a misalignment between a company’s long-term strategic goals and the actions or directions of third parties. These risks can derail strategic initiatives and impact market positioning.

Key Risk Factors:

Misalignment of Objectives: Divergent business goals between a company and its third parties can lead to conflicts and inefficiencies.
Intellectual Property Risks: Sharing sensitive business information with third parties carries the risk of IP theft or misuse, potentially eroding competitive advantages.

Detailed Mitigation Strategies:

Alignment Workshops: Regularly engage with third parties to ensure alignment of objectives and expectations.
IP Protection Measures: Implement strict controls on IP rights and usage, and enforce non-disclosure agreements.

Table: Strategic Risk Mitigation Techniques

Risk Type	Potential Impact	Mitigation Technique
Objective Misalignment	Strategic drift and wasted resources	Foster open dialogue and regular strategy reviews
IP Leakage	Loss of competitive edge	Secure IP agreements and conduct regular compliance checks

Conclusion

Navigating third-party risks is crucial for maintaining the integrity and success of a business. As companies increasingly rely on external partners for essential services and supplies, the potential for risks related to finance, reputation, and strategy grows.

By Abhinandan, 1 yearJune 6, 2024 ago

Employee Screening

Risk & Compliance

Financial Intelligence

Identity Verification

Utilities

Employment

Entity/Business Level

Professional

Banking & Payments

Fraud Detection

Background Verification

Due-Diligence

Resource Library

Featured Resource

third party risk management

Introduction To FSSAI Verification And Its Importance For Food Businesses

Types Of FSSAI Licenses And Registration

1. FSSAI Registration for Small Food Businesses (Basic Registration)

2. FSSAI State License

3. FSSAI Central License

How To Apply For FSSAI Registration And License

1. Basic Registration Process (For Small Businesses)

2. State and Central License Application Process

3. Important Considerations for FSSAI Application

Ongoing FSSAI Compliance For Food Businesses

1. Maintaining Food Safety Standards

2. Regular Inspections and Audits

3. Reporting and Record Keeping

4. Renewal and Updates

5. Labelling and Packaging Compliance

Penalties For Non-Compliance With FSSAI Regulations

1. Monetary Fines and Penalties

2. Suspension or Revocation of FSSAI License

3. Imprisonment for Serious Offences

4. Compensation to Affected Consumers

5. Seizure of Goods

How To Avoid Penalties And Maintain FSSAI Compliance

Resources And Important Links For FSSAI Compliance

1. Official FSSAI Website

2. FSSAI Food Safety Compliance System (FoSCoS)

3. FSSAI Compendium of Licensing Regulations

4. Training and Certification Programs

5. FSSAI Helpline and Support

Conclusion

What Is Vendor Risk Management (VRM)?

How To Choose A Vendor Risk Management Tool?

7 Best Vendor Risk Management Tools

1. AuthBridge: Third-Party Risk Management Solution

Key Features and Offerings

2. UpGuard

3. OneTrust

4. LogicGate

5. Prevalent

6. Vanta

7. Panorays

Conclusion

Introduction

Understanding GST Returns

What are GST Returns?

Why Verifying GST Returns Is Crucial During Onboarding

What Are Bank Statements?

Key Components Of A Bank Statement:

Why Verifying Bank Statements Is A Must In Third-Party Onboarding:

GST Returns vs Bank Statements: Key Differences And Similarities

Why Verifying GST Returns & Bank Statements Is Important For Compliance

How Third-Party Onboarders Can Leverage GST And Bank Statement Verification

Conclusion

Top 13 Third-Party Risk Management (TPRM) Softwares In India

End-to-End Risk Management

Compliance and Regulatory Assurance

Continuous Monitoring and Alerts

Technology-Driven Insights

Third-Party Screening and Verification

Risk Scoring and Prioritisation

Efficient Onboarding and Contract Management

Industry-Specific Solutions

Data Privacy and Security

2. UpGuard

3. SecurityScorecard

4. BitSight