RBI Sets Up New Mechanism to Review Regulations Periodically

The Reserve Bank of India (RBI) has announced the establishment of a new institutional framework to periodically review its regulations. The move, unveiled on Wednesday, aims to make the regulatory framework more effective, responsive, and aligned with the evolving requirements of the financial sector.

Creation of the Regulatory Review Cell

A new Regulatory Review Cell (RRC) has been constituted within the RBI’s Department of Regulation. The RRC will become effective from October 1, 2025, and will oversee the systematic internal review of all regulations issued by the central bank. Each regulation will be revisited once every five to seven years, ensuring a structured and phased approach to regulatory assessment.

Establishment of the Advisory Group on Regulation

Alongside the RRC, the RBI has also created an independent Advisory Group on Regulation (AGR) to boost stakeholder engagement. The AGR will serve as a bridge between the financial industry and the regulator, channelling feedback and perspectives from diverse market participants. This initiative is expected to strengthen dialogue between regulators and industry players.

Leadership and Membership of the AGR

The AGR will be chaired by Rana Ashutosh Kumar Singh, Managing Director of the State Bank of India. Other members include:

• T. Srinivasaraghavan, former MD & Non-Executive Director, Sundaram Finance
• Gautam Thakur, Chairman, Saraswat Co-operative Bank
• Shyam Srinivasan, former MD & CEO, Federal Bank
• Ravi Duvvur, former President & CCO, Jana Small Finance Bank
• S. Kannan, former MD & CEO, ICICI Prudential Life Insurance

The group has been given an initial tenure of three years, with the option to extend for another two years following a review. It also has the flexibility to co-opt additional experts as required.

Objectives of the New Mechanism

According to the RBI, this twin mechanism, comprising the RRC and AGR, will ensure that regulations remain contemporary and effective. By introducing a structured and continuous review process, the central bank seeks to balance regulatory efficiency with the dynamic needs of the financial ecosystem. Industry feedback through the AGR will help align regulatory measures with on-ground realities.

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Conclusion

The launch of the RRC and AGR marks a significant shift in the RBI’s regulatory approach, embedding periodic reviews and stakeholder engagement into its framework. This mechanism is expected to enhance transparency, improve adaptability, and ensure that regulations continue to support the stability and growth of India’s financial system.

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