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RBI amplifies public engagement 72 consultations during 20212024 | Finance News

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RBI, Reserve Bank of India

Mumbai: A security personnel stands near the RBI headquarters, in Mumbai, Friday, June 7, 2024. (Photo: PTI)


The Reserve Bank of India (RBI) has conducted 72 public consultations across various regulatory and supervisory domains in the past three years, as the central bank broadened its public engagement, RBI’s annual report said.


The Department of Regulation (DoR) in the RBI, which is entrusted with formulating guidelines for regulated entities, has held 21 public consultations in 2023-24, compared to six and five in the previous two years.


The Department for Payments and Settlements (DPSS) and the Department of Supervision (DoS) have also enhanced their consultations with stakeholders this year.


The regulator has been conducting public consultations over the past few years to seek public feedback on new and major regulatory measures, incremental changes, and comprehensive reviews of existing guidelines.


Between 2021 and 2024, RBI conducted 72 public consultations across various regulatory and supervisory areas, providing 15-60 days for feedback.


In the financial year 2023-24, the central bank has conducted 40 public consultations, according to RBI’s annual report.


Following the 2022 recommendation from the Regulations Review Authority 2.0, the RBI places draft instructions in the public domain for feedback before finalising them.


Public consultations are undertaken by posting working group reports, discussion papers, and draft guidelines on its website.


The RBI also conducts in-house consultations and sets up advisory committees for detailed discussions. FAQs are issued to address stakeholder queries, ensuring continuous feedback.


Regulatory measures on consumer credit and bank credit to NBFCs were announced on November 16, 2023, to pre-empt potential risks.


After the pandemic, credit offtake in the consumer segment increased significantly, coupled with NBFCs’ growing reliance on bank borrowings, raising regulatory concerns. Despite a strong asset quality, prudential intervention was seen as necessary.


The participative approach helps identify inconsistencies, gaps, and stakeholder concerns, leading to more robust regulations.


Periodic interactions with stakeholders on monetary policy and other issues further enhance transparency and inclusiveness in policy formulation, the report said.


The Department of Supervision also initiated a host of measures in 2023-24 to strengthen onsite and offsite supervision, revamping the stress testing model, and strengthening of early warning signal and fraud risk management system.


The FinTech Department expanded the scope and coverage of central bank digital currency (CBDC)-Wholesale (CBDC-W) and CBDC-Retail (CBDC-R) pilots; and launched a pilot project for a public tech platform for frictionless credit.


On September 21, 2023, the RBI issued a draft Master Direction on Wilful and Large Defaulters.


The proposed Master Direction consolidated all instructions on willful and large defaulters, incorporating modifications based on court judgments and feedback from the Indian Banks’ Association, banks, and other stakeholders.


The guidelines will be issued after evaluating these comments, the annual report said.


“The principal channel for public consultations remains seeking written comments/feedback on draft regulatory policies while other modes of public consultations such as discussion with stakeholders and setting up independent working group/committee are also used to have a holistic view on the technical and complex regulatory issues,” RBI said, adding the need for public consultation is also evaluated while assessing policy risk.

First Published: Jun 17 2024 | 12:11 AM IST

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