RBI to Ease Compliance Burden and Refine Regulations Amid Evolving Risks
RBI to Ease Compliance Burden and Refine Regulations Amid Evolving Risks
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Mumbai, June 20, 2024 - RBI Governor Shaktikanta Das underscored the importance of robust governance and resilient financial systems at the global conference on financial resilience. He highlighted upcoming guidelines set for release next month, emphasizing clear roles and responsibilities for boards and executive management. This, he said, is essential to balancing business growth with robust risk management for sustained success.

The Reserve Bank of India (RBI) has announced measures to ease the compliance burden on financial service entities while refining the regulatory and supervisory framework to meet evolving challenges. At the same time, the central bank is emphasizing the critical role of boards of directors and executive management in building resilience in the financial sector.

Governor Das announced that new guidelines aimed at streamlining regulations will be unveiled next month. The Regulations Review Authority (RRA) 2.0, constituted by the RBI, has conducted a comprehensive review of regulations. Das highlighted the RRA's efforts in withdrawing redundant instructions and recommending measures to ease compliance, streamline reporting, and clarify regulatory instructions.

Speaking at the second global conference on financial resilience organized by RBI's College of Supervisors in Mumbai, Governor Das stressed the importance of strong governance as the "bedrock for informed and strategic decisions" aligned with long-term goals and risk management principles. He emphasized the need for robust risk mitigants to ensure the long-term success and resilience of regulated entities and the financial system as a whole.

"Business growth is important, but it should never come at the expense of taking on unacceptable risks," Das cautioned. He called for clear roles and responsibilities for boards of directors and executive management, stressing their need for expertise and independence to make informed decisions and effectively oversee operations.

Governor Das also highlighted the strength of India's domestic financial system, backed by robust capital adequacy, low levels of non-performing assets, and healthy profitability of banks and non-banking financial companies (NBFCs). He contrasted this with the collapse of several regional banks in the US and Europe amid rising interest rates.

"There is, however, no room for complacency," Das warned. He called for continuous vigilance and proactive measures to sustain India's financial progress.

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