RBI's new regulatory framework relies on significant self-policing
Mint Mumbai|January 15, 2024
The broad goal is to not only enable early risk recognition and mitigation but also reduce the regulatory burden for everyone
RAJRISHI SINGHAL
RBI's new regulatory framework relies on significant self-policing

Shaktikanta Das, Reserve Bank of India (RBI) governor, deviated from his prepared speech while delivering the keynote address at Mint's recent BFSI Summit and provided a couple of interesting asides. The governor's office, he said, had been encouraging one-on-one discussions with bank chief executives and a spirit of free exchange had allowed RBI to pick up industry trends that would have otherwise reached the central bank much later. Consequently, the central bank's regulatory actions were occasionally based on such inputs. Das also mentioned in passing that many bankers had been complaining to him about the ever-increasing RBI-imposed regulatory and compliance burden.

These two digressions, taken in conjunction with his speech, provide pointers to the central bank's evolving regulatory architecture. Specifically, Governor Das's stewardship is attempting to make regulation functional at two elementary levels: encourage self-regulation at both the entity level and industry level. The understanding is that since both the entity and industry collective have more knowledge and information than the regulator, pre-emptive actions at these stages will be more timely and effective. Both, though, might need some rethinking and reformatting.

هذه القصة مأخوذة من طبعة January 15, 2024 من Mint Mumbai.

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هذه القصة مأخوذة من طبعة January 15, 2024 من Mint Mumbai.

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