The RBI's Regulations Review Authority has recommended that all central bank regulations include a reason and be reviewed on a regular basis to keep up with changing industry practises and the financial landscape.
The Reserve Bank of India established the Regulations Review Authority (RRA 2.0) in April of last year with the goal of decreasing the regulatory compliance burden on Regulated Entities (REs) by consolidating regulatory instructions and rationalising reporting requirements.
"The Reserve Bank would internalise the RRA's suggestions in order to achieve the desired results. The RRA exercise should result in regulatory instructions and returns becoming clearer, simpler, more accessible, and more rational in the future," the central bank stated in a statement.
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 stated.
Wherever appropriate, it stated, the instructions should be supplemented with FAQs/guidance notes and pictures. The RRA also recommends that existing regulations be reviewed on a regular basis to ensure that they are in line with changing industry practises and the financial landscape.
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