RBI to ease compliance burden while fine tuning regulations to address evolving risks

Kolkata: The Reserve Bank of India has decided to reduce the compliance burden to make life easier for the financial services entities while it is finetuning the regulatory and supervisory framework to make them ready to face evolving challenges.

In parallel, the central bank is also stressing on the role of the board of directors and the executive management in establishing financial sector resilience.

New guidelines on streamlining of regulation will be unveiled next month, RBI Governor Shaktikanta Das said.


The regulator has undertaken a comprehensive review of regulations under the aegis of the Regulations Review Authority (RRA) 2.0 constituted by it.

"Apart from withdrawal of many redundant instructions, the RRA has also made valuable recommendations to ease compliance and reduce the regulatory burden; streamline the reporting mechanism; and bring in more clarity in regulatory instructions," Das said Thursday, at the second global conference on financial resilience organised by RBI's College of Supervisors in Mumbai.

Das underscored the need for strong governance terming it as the "bedrock for informed and strategic decisions" that align with long-term goals and risk management principles.

"Pursuit of business growth is important, but it should never come at the expense of taking on unacceptable risks. Robust risk mitigants are essential for ensuring long-term success and resilience of a regulated entity as well as the overall financial system," he said, calling for establishing clear roles and responsibilities for the board of directors and executive management.

"Both of them should possess necessary expertise and independence to take the right decisions and to effectively exercise appropriate oversight on operations," he said.

India’s domestic financial system is however in a much stronger position, backed by robust capital adequacy, low levels of non-performing assets, and healthy profitability of banks and NBFCs, while several regional banks in the US including Silicon Valley Bank and Credit Suisse in Europe collapsed amid rising interest rates.

"There is, however, no room for complacency. We must keep a constant vigil and continue to take proactive measures to sustain this progress," RBI Governor said.