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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