Authority suggests periodic review of RBI regulations
The Regulations Review Authority of the RBI has suggested that all regulations of the central bank should be reviewed periodically to align them with evolving industry practices and financial landscape. The Regulat-ions Review Authority (RRA 2.0) was set-up by the Reserve Bank of India in April last year with the objective of reducing the compliance burden on Regulated Entities (REs) by streamlining the instructions and rationalising reporting requirements.
“The Reserve Bank would internalise the RRA's suggestions in order to achieve the desired results,” the central bank stated.
Any ad hoc return developed for capturing specialised data should be mandated with a sunset provision of no more than six months duration, according to the RRA 2.0 report.
“Regulatory instructions should incorporate a concise statement of object underpinning the reason for issue of instructions to address gaps in understanding, interpreting, and executing the instructions,” it said. Wherever appropriate, the instructions should be supplemented with FAQs/guidance notes and pictures.
RRA guides that to address gaps in understanding, interpreting, and implementing the instructions, the regulatory instructions should contain a brief statement of object underlying the rationale for issuance of instructions. The instructions should be supplemented with FAQs/guidance notes and illustrations, where necessary.
Further, the authority has recommended the elimination of paperbased returns and has suggested a periodic review of regulatory and supervisory returns filed by the REs at least once in three years to ascertain their relevance and periodicity. “Any ad hoc return introduced for capturing specific data should be prescribed with a sunset clause of not more than six months duration."
Moreover, the Master Circulars may be updated in a time-bound manner and may eventually be converted into Master Directions, it said.