RBI to consolidate 8,000 regulations, set up review cell, says governor Sanjay Malhotra

RBI governor Sanjay Malhotra

The Reserve Bank of India (RBI) will consolidate more than 8,000 regulations to simplify the central bank’s complex and often overlapping rulebook to simplify compliance and enhance clarity, governor Sanjay Malhotra has said.

Addressing the Financial Express Modern BFSI Summit on July 25, Malhotra said the RBI would consolidate more than 8,000 regulations, of which around 5,000 are obsolete or redundant, while retaining and reorganising the remaining 3,000 under a new streamlined framework.

“Let me make it clear that this is a consolidation of all existing regulations, circulars, and master directions. Our attempt is to come out with one master circular for all banks, and a similar one for NBFCs,” he said.

The central bank is in the process of categorising the regulations into 33 thematic subjects, which would help align compliance structures across banks, non-banking finance companies (NBFCs), and other regulated entities.

The broader vision is to simplify compliance, enhance clarity, and remove the duplicative burden on institutions. The governor also flagged the pressure created by the growing number of internal compliance obligations.

“There are nearly 100 board-approved policies that every bank must have. This takes up a lot of the board’s time and energy,” Malhotra said. “So, we’re asking, how can we rationalise this so that boards can focus more on strategy and policymaking, rather than administrative overload?”

The RBI has already taken steps to reduce complexity in day-to-day compliance. “We’ve rationalised the number of regulatory returns that supervised entities are required to submit,” he said. “All of this is being done to bring simplicity and clarity, and to improve overall compliance outcomes.”

Malhotra said the RBI is setting up a regulatory review cell that would review all regulations every five or seven years. It will examine whether regulations remain relevant, assess the cost-benefit trade-offs, and determine whether gaps remain from the standpoint of financial stability and consumer protection.

“The purpose is to see whether we have any obsolete regulations, and whether there’s the right balance between efficiency and financial stability,” Malhotra said.

“We will also look at regulatory gaps, and examine whether regulations are still aligned with consumer-centricity and evolving financial risks.”

The RBI has already put in place a regulation-making framework that includes mandatory consultation and impact analysis. “What’s the impact of a regulation, from a cost and compliance perspective? While this is something we’ve already been doing, we we’ve now formalised it,” he said.