Regulations Review Authority 2.0

• 08 May 2021

Why in News

Recently, the Reserve Bank Of India (RBI) has constituted an Advisory Group to assist the second Regulations Review Authority (RRA 2.0).

• The RBI has set up the RRA 2.0, initially for a period of one year from 1^st May, 2021, with a view to streamline regulations and reduce the compliance burden of regulated entities.

Key Points

• Background:
  
  • In 1999, the RBI had set up a Regulations Review Authority (RRA) for reviewing the regulations, circulars, reporting systems, based on the feedback from the public, banks, and financial institutions.
• RRA 2.0:
  
  • It will focus on streamlining regulatory instructions, reducing compliance burden of the regulated entities by simplifying procedures and reducing reporting requirements, wherever possible.
    
    • It will also obtain feedback from regulated entities.
    • Regulated entities include commercial banks, urban co-operative banks, Non-Banking Financial Companies.

Reserve Bank of India

• Formation:
  
  • RBI was established on 1^st April, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.
  • Though originally privately owned, since nationalization in 1949, the Reserve Bank is fully owned by the Government of India.
• Major Functions:
  
  • Monetary Authority: Formulates, implements and monitors the monetary policy.
    
    • Recent Initiative: Government Securities Acquisition Programme (G-SAP).
  • Regulator and supervisor of the financial system: Prescribes broad parameters of banking operations within which the country's banking and financial system functions.
  • Manager of Foreign Exchange: Manages the Foreign Exchange Management Act, 1999.
  • Issuer of currency: Issues and exchanges or destroys currency and coins not fit for circulation.
  • Developmental role: Performs a wide range of promotional functions to support national objectives.
  • Regulator and Supervisor of Payment and Settlement Systems: Introduces and upgrades safe and efficient modes of payment systems in the country to meet the requirements of the public at large.
    
    • Recent Initiatives: Digital Payments Index, Payments Infrastructure Development Fund
    • National Payments Corporation of India (NPCI), an umbrella organisation for all retail payments systems in India, was set up with the guidance and support of the RBI and Indian Banks’ Association (IBA).
  • Related Functions:
    
    • Banker to the Government: performs merchant banking function for the central and the state governments; also acts as their banker.
    • Banker to banks: maintains banking accounts of all scheduled banks.
    • The Ways and Means Advances (WMA) are short-term loan facilities which allow the Centre and states to borrow funds from the RBI to bridge their temporary mismatch between expenditure and receipts.
• RBI’s Publications:
  
  • Consumer Confidence Survey (CCS - Quarterly)
  • Inflation Expectations Survey of Households (IESH - Quarterly)
  • Financial Stability Report (Half-Yearly)
  • Monetary Policy Report (Half-Yearly)
  • Report on Foreign Exchange Reserves (Half-Yearly)

Source: IE