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RRA Refocus On Circulars- What The RRA’s recommendation To RBI Was And What It Means For The Fintech Industry

The Reserve Bank of India(RBI) stated the Regulations Review Authority(RRA 2.0) had recommended withdrawing an additional 225 redundant circulars on the RBI website. The Reserve Bank had set up the RRA 2.0(Regulations Review Authority) to reduce the burden of compliance on REs(regulated entities).

“RRA 2.0(Regulations Review Authority 2.0) has recommended withdrawal of an additional 225 circulars in the third tranche of recommendations,” the Reserve Bank Of India said in a statement last week.

The RBI is separately issuing the notifications, including the list of specific instructions recommended for withdrawal.

Once the Reserve Bank Of India does remove these redundant circulars, it will be a welcoming step for optimizing the regulatory compliance associated with the sector. Moreover, it will significantly help the banking and fintech industries as financial technology is constantly impeded by regulatory bureaucracy.

In the second tranche, the Regulations Review Authority 2.0 had also recommended merger/ discontinuation/ conversion to online submission of 65 returns. In addition, they also emphasized creating a new ‘Regulatory Reporting’ link on the central bank’s official website to consolidate all the information relating to any regulatory reporting.

History of RRA 2.0

The Reserve Bank of India established the Regulations Review Authority 2.0 to review all the regulatory instructions, reduce the burden of compliance on Regulated Entities (REs), and remove redundant and duplicate instructions.

Regulations Review Authority 2.0 focuses on properly streamlining regulatory instructions, reducing requirements for reporting wherever possible, and reducing the burden of compliance of the regulated entities(REs) by simplifying procedures and processes.

The Reserve Bank of India had established an RRA initially for only a year from April 1, 1999, for mostly reviewing the regulations, reporting systems, and circulars based on the genuine feedback from the banks, the public, and other financial institutions(FIs).

The recommendations of the Regulations Review Authority enabled streamlining and incrementing the effectiveness of various procedures and simplified regulatory prescriptions. It paved the way for issuing master circulars and reduced reporting burden on regulated entities; the RBI had said in April last year while announcing the setting up of RRA 2.0.

What this means for financial technology

The talk needs to be walked from the RBI website to the financial companies and regulated entities in the form of new rules. Once the redundant circulars are effectively withdrawn, it will be a comforting move for regulatory compliance in all sectors. This is particularly true in fintech. As the fintech industry is closely knit with advancing technology, outdated regulations constantly impede the excellent implementation of solutions.

Although RBI and other regulating entities are striving to walk the fine line of easing the processes for regulated entities while affirming the safety and security of the customers, it remains difficult to follow the proper regulatory compliance. This is especially true in cases of compliance involving digitization and automation. 

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Signzy is a market-leading platform that is redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering totally customizable workflows. It gives these players access to an aggregated marketplace of 240+ bespoke APIs that can be easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru, and it has a strong presence in Mumbai, New York, and Dubai.

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Written By:

Mahesh Mohan

Mahesh is a Creative Writer intent on learning and sharing knowledge. He believes Finance is the matrix of functionality, and Technology is evolution. Amalgamate the two, and you get the most dynamic beast in modern civilization- Fintech. He explores this sphere with keen eyes on the terraforming ecosystem. He tries to balance his professional enthusiasm with his passion-driven love for history, mythology, and stories of all forms.

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