RBI sets up new Regulations Review Authority (RRA 2.0)

The Reserve Bank of India (RBI) had initially set up a Regulations Review Authority (RRA) for one year on 1 April 1999. The RBI set up the RRA to review the circulars, regulations, and reporting systems based on the feedback received from the banks, public and financial institutions. 

The recommendations given by the RRA helped in streamlining and increasing the effectiveness of many procedures, paving the way for the issuance of master circulars, simplifying regulatory prescription, and reducing the reporting burden on regulated entities.

The RBI, considering the developments in its regulatory function and the evolution of the regulatory perimeter, decided to set up a new Regulatory Review Authority (RRA 2.0) through a circular on Thursday. The RBI has proposed that the RRA 2.0 undertake the review of the RBI’s compliance and regulation procedures for streamlining or rationalising them and making them more effective.

The RBI stated that the RRA 2.0 would function for one year from its establishment to review the regulatory prescriptions internally and seek suggestions from the RBI regulated entities and stakeholders. The RRA 2.0 will review regulatory prescriptions for simplifying them and ease of its implementation.

The RRA 2.0’s focus will be to reduce the regulatory entities’ compliance burden and streamlining the regulatory instructions by simplifying the procedures and reducing reporting requirements wherever possible. The terms of the RRA 2.0 is as follows:

• To make supervisory and regulatory instructions more effective by eliminating any duplications and redundancies.
• To reduce regulated entities’ compliance by revoking any obsolete instructions, streamlining the reporting mechanisms and obviating paper-based submission of returns wherever possible.
• To obtain feedback from the regulated entities on the enhancement of ease of compliances and simplification of procedures.
• To examine and suggest the required changes for the dissemination process of the RBI instructions and circulars, including suggestions on the manner of issuing and updating circulars and website linkages.
• To identify any other issue which is pertinent to the subject matter.

The RBI appointed Shri. M.Rajeshwar Rao, Deputy Governor of the RBI as the head of the RRA 2.0. The RBI stated that the RRA 2.0 would be set up from 1 May 2021 for one year unless the RBI extends its tenure. The setting up of RRA 2.0 will help to streamline the procedures of the RBI regulated entities and ensure their effective implementation. 

The RRA 2.0 will also look into easing the compliances, thus reducing the compliance burden of the regulated entities. The RRA 2.0 will consider the suggestions from internal and external stakeholders for better insight while reviewing the RBI procedures, circulars, and regulations. The RRA 2.0 is expected to help the RBI, and its regulated entities streamline the procedures and reduce their burden for their smooth and better functioning.  

For any clarifications/feedback on the topic, please contact the writer at mayashree.acharya@cleartax.in