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Indian Economy

Regulations Review Authority 2.0

  • 08 May 2021
  • 3 min read

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 1st 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 1st 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.
    • 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.
    • 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:

Source: IE

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