MUMBAI: The Reserve Bank of India has established a 30-member Regulatory Review Cell (RRC) to overhaul its regulatory framework by identifying obsolete rules and simplifying compliance across the financial sector. The move is designed to consolidate over 8,000 existing regulations, circulars, and notifications into a more streamlined and contemporary structure.
The RRC is envisioned as a permanent internal mechanism, differing from past one-time review bodies. Its aim is to ensure that financial rules remain relevant, consumer-centric, and operationally efficient over time. The central bank expects the process to significantly reduce regulatory duplication and enhance transparency.
Target: Reduce 8000 Rules to 3000
According to internal estimates, around 5,000 of the RBI’s existing rules may be redundant or outdated. The newly formed Cell has already shortlisted 33 priority subjects for immediate unification and review. The ultimate goal is to trim the framework to approximately 3,000 coherent and applicable rules.
The RRC’s formation follows the conclusion of the Regulations Review Authority 2.0 in 2022, which led to the withdrawal of over 1,000 outdated circulars. However, unlike its predecessor, the RRC is not a temporary task force. It will revisit and reassess regulatory structures every five to seven years as part of a cyclical audit.
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Internal Oversight with Sector-Wide Impact
The Cell comprises officers from various departments within the RBI and is currently reviewing legacy circulars, assessing compliance gaps, and proposing updates to align regulations with present-day financial operations. This is expected to lower the operational burden on banks and non-banking financial institutions, giving them more capacity to focus on core business and risk management.
By embedding regulatory simplification into its institutional process, the RBI is also aiming to curb regulatory arbitrage and align oversight intensity across financial entities. The move is aligned with the central bank’s long-term strategy to modernise rulemaking, build systemic trust, and improve proportional governance.
Although the overhaul is not expected to create immediate drastic shifts, industry experts anticipate a more agile regulatory ecosystem that benefits both consumers and financial institutions in the long run.