Follow public consultation process: RRA’s suggestion to RBI

BL Mumbai Bureau | | Updated on: Jun 14, 2022
Reserve Bank of India

Reserve Bank of India | Photo Credit: PAUL NORONHA

Points out 714 regulatory instructions which have either become obsolete or redundant

The Regulations Review Authority (RRA 2.0) has recommended the Reserve Bank of India (RBI) completely eliminate paper-based returns, and follow a process of public consultation for all important regulatory changes being contemplated.

Further, instructions to the regulated entities (REs) should contain a brief statement of objective underlying the rationale for their issuance.

The RRA’s Advisory Group (headed by Swaminathan J, Managing Director, State Bank of India) has recommended withdrawal of 714 regulatory instructions which have either become obsolete or redundant and have not been explicitly withdrawn.

The RRA noted while REs are required to comply with regulatory instructions, it is also recognised that any gap in understanding, interpreting, and implementing the instruction may lead to compliance of the instructions in letter, but not spirit.

Therefore, the authority recommended the regulatory instructions should contain a brief statement of objective underlying the rationale for issuance of instructions.

“This statement can help readers understand the necessity of the regulation. Also, it has been recommended the instructions should be supplemented with FAQs/ guidance notes and illustrations, wherever necessary,” the Authroity said.

RRA recommended creating a separate web page — ‘Regulatory Reporting’ on the RBI website. All the information relating to regulatory, supervisory and statutory returns would be consolidated at a single source on the RBI website.

The Authority has recommended complete elimination of paper-based returns and has identified 65 regulatory returns which should either be discontinued/merged with other returns or shall be converted into online returns.

A periodic review of regulatory or supervisory returns at least once in three years has been suggested.

RRA recommended shifting from the current prescription of submitting data on a reporting fortnight basis to a system of reporting data on the 15th and last working day of every calendar month.

This would improve inter-temporal comparison of banking data and other economic variables and improve data quality.

Published on June 14, 2022
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