Constitution of the Regulations Review Authority (RRA) 2.0

Ashish M. Shaji

29 Apr, 2021

The Reserve bank announced the setting up of regulations review authority 2.0 to review its regulations internally as well as in consultation with other stakeholders. M Rajeshwar Rao, Deputy Governor, has been appointed as the head of this authority, and it would be set up for one year period from 1^st May 2021, unless this tenure is extended. In this article we shall discuss the background story leading up to its constitution and also its terms.

Regulations Review Authority (RRA): Background story

The Reserve bank initially set up an RRA for a year on 1^st April 1999. It set up the RRA to review the circulars, regulations, and reporting systems based on the feedback obtained from banks, public and financial institutions.

The recommendations provided by the RRA assisted in streamlining and enhancing the effectiveness of numerous procedures, thus paving the way for the master circular issuance, simplifying regulatory prescription, and reducing the reporting burden on regulated entities.  

The Reserve bank considering the development in its regulatory function and the evolution of the regulatory perimeter, decided to set up RRA 2.0^[1] through a circular.  

Brief on Regulations Review Authority 2.0

The Reserve Bank proposed that the RRA 2.0 shall undertake the review of the RBI’s compliance and regulation procedures to streamline or rationalize them and make them more effective.

It further stated that the RRA 2.0 would function for a year from its establishment to review the regulatory prescriptions internally and get suggestions from the RBI regulated entities and stakeholders. RRA 2.0 shall review regulatory prescriptions to simplify them and ease its implementation.

Its focus would be to minimize the compliance burden of regulatory entities and streamline the regulatory instructions by simplifying the procedures and minimizing reporting requirements wherever possible.

Terms of RRA 2.0

Its terms are as follows:

• To make supervisory as well as regulatory instructions more effective by eradicating any duplications and redundancies.
• To reduce the compliance of regulated entities by revoking any obsolete instructions, streamlining reporting mechanism, and obviating paper-based returns’ submission wherever possible.
•  To get feedback from the regulated entities on the ease of compliances and simplification of procedures enhancement.
• To examine and suggest required changes for the process of dissemination of the RBI instructions and circulars, including suggestions on the manner of issuing and updating circulars and website linkages.
• To identify a matter which is pertinent to the subject matter.

How will the Regulations Review Authority 2.0 assist?

It will help in the following ways:

• The RRA 2.0 shall look into easing the compliances, thereby reducing the compliance burden of the regulated entities.
• Further, it shall consider the suggestions from internal as well as external stakeholders for better insight when reviewing the procedures of RBI, circulars, and regulations.
• RRA 2.0 shall help the Reserve bank and its regulated entities in streamlining the procedures and reduce their burden for better and smooth functioning.

Conclusion

As stated earlier, the reserve bank has appointed M Rajeshwar Rao, Deputy Governor, Reserve Bank of India, as the head of the Regulations Review Authority. This authority shall be set up from the beginning of the month of May for one year unless RBI extends its tenure. We have attached the RBI circular regarding the same with this article for accurate information on it.

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