Do away with circulars: RBI panel
- May 3, 2022
- Posted by: OptimizeIAS Team
- Category: DPN Topics
Do away with circulars: RBI panel
Subject: Economy
Section: Monetary Policy
Context:
The Regulations Review Authority (RRA 2.0) has recommended the withdrawal of an additional 225 circulars issued by the Reserve Bank of India.
Details:
The RBI has set up the RRA 2.0, initially for a period of one year from 1st May, 2021, with a view to streamline regulations and reduce the compliance burden of regulated entities.
The terms of reference of RRA 2.0 include making regulatory and supervisory instructions more effective by removing redundancies and duplications, if any; and obtaining feedback from regulated entities on simplification of procedures and enhancing ease of compliance.
The RRA has constituted an Advisory Group, representing members from regulated entities, including compliance officers, to support the RRA in achieving the objective set forth in the terms of reference of RRA 2.0. The Group will assist the RRA by identifying areas/ regulations/ guidelines/ returns which can be rationalized and submit reports periodically to RRA containing the recommendations/ suggestions.
Regulated Entities:
“Regulated Entities” (REs) means every entity regulated by the Reserve Bank of India.
- All Scheduled Commercial Banks (SCBs)/ Regional Rural Banks (RRBs)/ Local Area Banks (LABs)/ All Primary (Urban) Co-operative Banks (UCBs) /State and Central Co-operative Banks (StCBs / CCBs) and any other entity which has been licenced under Section 22 of Banking Regulation Act, 1949, which as a group shall be referred as ‘banks’
- All India Financial Institutions (AIFIs)
- All Non-Banking Finance Companies (NBFC)s, Miscellaneous Non-Banking Companies (MNBCs) and Residuary Non-Banking Companies (RNBCs).
- All Payment System Providers (PSPs)/ System Participants (SPs) and Prepaid Payment Instrument Issuers (PPI Issuers)
- All authorised persons (APs) including those who are agents of Money Transfer Service Scheme (MTSS), regulated by the Regulator.
Background:
The central bank had set up an RRA initially for a period of one year from April 1, 1999, for reviewing the regulations, circulars, reporting systems, based on the feedback from the public, banks, and financial institutions.
The recommendations of the RRA enabled streamlining and increasing the effectiveness of several procedures, simplifying regulatory prescriptions, paved the way for issuance of master circulars, and reduced reporting burden on regulated entities.