RBI Regulatory Overhaul

The RRC's creation will support RBI's plan to consolidate regulations into a refined, coherent set of approximately 3,000 active regulations.

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In the first phase, it has identified 33 core subjects where it will unify directives. "The regulatory review cell is tasked with assessing regulations every 5-7 years," added Malhotra. This rationalisation will enhance clarity, reduce compliance costs, and free up management bandwidth for strategic governance.

Sources indicate that this time it's an internal exercise, with around 30 officers from various departments in RBI already working on analysing and streamlining existing regulations for the past few months. The Cell is identifying regulatory blind spots and areas of insufficient oversight, and proposing corrective measures to fortify prudential norms. As this is a directive from the Governor himself, the process is expected to be expedited and will later be reviewed by him and the Deputy Governors.

Economist and former monetary policy committee member Ashima Goyal endorsed the shift, saying it could enhance transparency and reduce compliance costs, encouraging optimal market incentives.