Loading...

Top
Help
×

By creating an account you can:

Logo TaxTMI
Call Us / Help / Feedback

Contact Us At :

E-mail: [email protected]

Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters 0/2000
Make Most of Text Search
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
  6. Text Search
  7. The system will try to fetch results that contains ALL your words.
  8. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
  9. Text Search
Add to...
You have not created any category. Kindly create one to bookmark this item!
Create New Category
Hide
Title :
Description :
❮❮ Hide
Default View
Expand ❯❯
Close ✕
🔎 News - Adv. Search
TEXT SEARCH:

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In:
Main Text + AI Text
  • Main Text
  • Main Text + AI Text
  • AI Text
Category: ?
Categorized by AI
---- All Categories ----
  • ---- All Categories ----
  • Income Tax
  • GST
  • Customs, DGFT & SEZ
  • FEMA & RBI
  • Corp. Laws, SEBI & IBC
  • PMLA, Black Money & ED
  • Budget
  • News and Press Release
  • PTI News
Month:
---- All Months ----
  • ---- All Months ----
  • January
  • February
  • March
  • April
  • May
  • June
  • July
  • August
  • September
  • October
  • November
  • December
Year:
---- All Years ----
  • ---- All Years ----
  • 2026
  • 2025
  • 2024
  • 2023
  • 2022
  • 2021
  • 2020
  • 2019
  • 2018
  • 2017
  • 2016
  • 2015
  • 2014
  • 2013
  • 2012
  • 2011
Sort By: ?
In Sort By 'Default', exact matches for text search are shown at the top, followed by the remaining results in their regular order.
Relevance Default Date
    Andhra records 21 per cent growth in net GST collections till July
    J&K crime branch chargesheets accused in separate bank, insurance fraud cases
    MCD-facilitated PM Vishwakarma Scheme enrols over 41,000 artisans in Delhi
    Gross GST mop-up grows 15.4 pc to over Rs 2.11 lakh cr in July on higher imports, sales
    Gross and Net GST revenue collections for the month of July, 2026
    India and Rwanda Hold First Joint Trade Committee Meeting to Deepen Bilateral Trade and Investment Cooperation
    West Bengal GST collection rises 2 pc in July to Rs 5,564 crore
    Gross GST collection kitty swells 15.4 pc to over Rs 2.11 lakh cr in July
    RBI says USD 40.82 bn mobilised under forex swap facility till Jul 31
    Sebi bars ZEEL for 2 months, Subhash Chandra, Punit Goenka for 1 year in Hyderabad land pledge case
    Department of Commerce Holds Workshop on Trade and Sustainable Development Policy Landscape
    GeM Launches 10-Day Celebrations Ahead of 10th Foundation Day, Unveils Commemorative Logo
    All Indian exports of dual-use items comply with international obligations: MEA
    PM Modi to inaugurate Bhogapuram Airport in Andhra on Aug 1
    HIGHLIGHTS
    Closely monitoring: India on US bill seeking up to 100 % tariffs on purchasers of Russian oil
    Delhi HC seeks ED stand on Nayan Raheja's plea against money laundering case
    Rupee appreciates 7 paise to close at 95.43 against US dollar
    PM Modi, UK PM Burnham commit to harnessing full potential of mega trade deal
    ITC Q1 profit declines 15.6 pc to Rs 4,508.79 cr; non-cigarette FMCG posts robust growth
❯❯
Maximize Maximize Maximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

+

Are you sure you want to delete "My most important" ?

NOTE:

News
Showing Results for :
Reset Filters
Results Found:
Show All Summaries Hide All Summaries
August 1, 2026
Show AI Summary
GST compliance enforcement through AI analytics supported sustained net GST collection growth despite rate rationalisation reforms and reduced compliance costs.
GST revenue mobilisation in Andhra Pradesh showed year-on-year growth in net GST and total commercial tax collections through July 2026, despite rate-rationalisation reforms. Revenue growth was attributed to AI-based scrutiny and analytics, machine-learning risk scoring, AI-driven IGST reversals, UPI-based enforcement analytics, data sharing, predictive analytics, registration verification, and Aadhaar-integrated expansion of the professional-tax base. These measures were stated to strengthen compliance, curb wrongful input tax credit claims, broaden taxpayer coverage, and improve revenue mobilisation.
August 1, 2026
Show AI Summary
Economic-offences fraud chargesheets address alleged fictitious loans, forged insurance surrender papers, and diversion of bank and policy funds.
Economic-offences chargesheets were filed in separate alleged bank and insurance fraud matters. The bank investigation alleged fictitious loan sanctions and overdrafts beyond delegated authority, involving cheating, forgery, use of forged documents and criminal conspiracy. The insurance investigation alleged that duplicate policy records and forged surrender documents were used to open a fraudulent account in a policyholder's name and divert policy proceeds. Records, witness statements, documentary evidence and forensic examination were cited in support of the allegations.
August 1, 2026
Show AI Summary
PM Vishwakarma Scheme implementation expands artisan enrolment, skills, credit, e-commerce access and export facilitation while addressing documentation barriers.
PM Vishwakarma Scheme implementation in Delhi facilitated artisan enrolment, application processing, skill training, toolkit distribution, loan access, e-commerce onboarding and export-related support. Awareness workshops and tele-calling campaigns were used to promote participation and follow up on benefits. Key implementation challenges concerned outreach to informal clusters, digital literacy, delays in Aadhaar and IEC documentation, and additional support for Divyang artisans. Planned action includes expanding workshops, scaling e-commerce onboarding, strengthening export facilitation and coordination with implementing agencies.
August 1, 2026
Show AI Summary
Goods and Services Tax collections rise on domestic consumption and imports, while elevated import revenue prompts assessment of underlying drivers.
Goods and Services Tax collections for July increased over the corresponding prior-year period, supported by domestic sales and imports. Gross receipts included Central GST, State GST and Integrated GST, with net GST revenue calculated after adjusting refunds. For the April-July period, gross and net collections also increased. Commentary linked domestic GST growth to consumption, formalisation and industrial activity, while identifying elevated import GST collections as an area requiring assessment of import composition, currency effects and volumes.
August 1, 2026
Show AI Summary
GST revenue collections show provisional gross, refund and net revenue trends, with State-wise settlement and domestic collection data.
GST revenue collections for July 2026 are reported provisionally through gross domestic and import revenue, domestic and export-related refunds, and net GST revenue after refunds. The data also sets out SGST collections and the SGST share of IGST settled to States and Union Territories, both monthly and cumulatively. State-wise domestic GST growth excludes GST on imported goods, while jurisdiction-wise data allocates collections between central and State formations and identifies CGST, SGST and IGST components.
August 1, 2026
Show AI Summary
Bilateral trade cooperation expands through a Joint Trade Committee covering investment, critical minerals, healthcare, digital technologies and market access.
Bilateral trade and investment cooperation between India and Rwanda is to be advanced through a structured Joint Trade Committee mechanism for reviewing commerce, diversifying trade, promoting investment, facilitating business engagement and addressing market-access and logistical issues. Priority cooperation includes critical minerals, pharmaceuticals and healthcare, agriculture and agro-processing, standards harmonisation, digital public infrastructure, fintech, cybersecurity, green mobility and renewable energy. Investment focal points will support engagement, while capacity-building assistance and close monitoring of the Agreed Minutes are intended to support time-bound implementation.
August 1, 2026
Show AI Summary
GST collection growth in West Bengal continued year-on-year in July but remained below the national growth trend.
West Bengal's July GST collection increased year-on-year and over the preceding month, marking a second consecutive month of annual growth. Official data also indicated that the State's annual growth rate was below the national trend, while gross domestic GST revenue excluding imports and overall gross GST collections including import-related taxes rose nationally during July.
August 1, 2026
Show AI Summary
GST collection growth reflects higher revenue mobilisation from domestic transactions and imports, with refunds adjusted in net revenue.
Goods and Services Tax collections increased in July, driven by higher revenue from domestic transactions and imports. The gross collection comprised Central GST, State GST and Integrated GST components. Refunds also increased during the month, and net GST revenue was determined after adjustment of refund outflows from gross tax receipts.
August 1, 2026
Show AI Summary
Concessional foreign-exchange swaps encourage bank deposits and foreign borrowings to strengthen balance-of-payments resilience and foreign-exchange liquidity.
The Reserve Bank of India introduced a concessional foreign-exchange swap facility to encourage foreign-currency inflows, strengthen the balance of payments and support foreign-exchange liquidity. The facility applies to fresh Foreign Currency Non-Resident (Bank) deposits, Overseas Foreign Currency Borrowings and External Commercial Borrowings. Foreign Currency Non-Resident (Bank) deposits constitute the principal source of inflows mobilised under the arrangement. The facility is available for specified time-bound periods, with a later availability period for Overseas Foreign Currency Borrowings and External Commercial Borrowings.
August 1, 2026
Show AI Summary
Unauthorised pledge of listed-company land triggered securities-market bars for disclosure failures and misuse of management authority.
Unauthorised pledge of ZEEL's Hyderabad land as security for loans obtained by promoter-linked entities was treated as a related-party transaction lacking prior audit committee approval. ZEEL failed to disclose the land's deployment in its financial statements. Its Chairman Emeritus was stated to have transferred title deeds by falsely representing management approval and to have concealed the transaction's nature. Securities-market prohibitions and monetary penalties were imposed with immediate effect.
August 1, 2026
Show AI Summary
Trade and sustainable development policy integrates carbon regulation, sustainability standards and domestic frameworks to strengthen trade competitiveness and preparedness.
Trade and Sustainable Development policy was examined in relation to international trade disciplines, sustainability regulation and India's trade strategy. Discussions considered carbon markets, carbon pricing, carbon border adjustment measures, sustainability standards and regulatory cooperation, and their implications for trade and industrial competitiveness. Domestic mechanisms, including the Carbon Credit Trading Scheme, Indian Carbon Market, Extended Producer Responsibility framework, and accreditation and conformity assessment systems, were considered for strengthening preparedness for emerging sustainability-related trade disciplines.
August 1, 2026
Show AI Summary
Digital public procurement engagement begins with stakeholder events promoting transparent, efficient and inclusive marketplace governance.
Government e-Marketplace launched ten-day celebrations preceding its tenth Foundation Day, including a commemorative logo, stakeholder events and recognition of employees, buyers and sellers. The programme begins a year-long nationwide outreach initiative bringing together buyers, sellers, policymakers, industry representatives and ecosystem partners through events, dialogues and collaborative platforms. Its stated focus is technology-enabled, transparent, efficient and inclusive public procurement.
July 31, 2026
Show AI Summary
Strategic trade controls require dual-use exports to comply with national law and international obligations amid arms-transfer allegations.
Strategic trade controls governing dual-use exports require Indian exports of dual-use items and technologies to comply with national law and India's international obligations. The stated framework applies to exports to various countries. In response to allegations concerning supplies to Israel, the position notes calls for an arms embargo covering direct or indirect transfers of arms and military material, including weapons, ammunition, parts and components, without determining the underlying allegations.
July 31, 2026
Show AI Summary
Greenfield airport development under a public-private partnership advances licensed international passenger, cargo, logistics, and sustainable infrastructure.
A greenfield international airport is being developed under a Public-Private Partnership and Design, Build, Finance, Operate and Transfer framework, with airport, aviation-hub, education and supporting infrastructure components. The airport has obtained an aerodrome licence and required safety, fire and environmental clearances. Passenger, airfield and terminal systems are designed for domestic and international operations. A cargo terminal with cold-chain facilities and integration with port, industrial-corridor and logistics networks are intended to strengthen exports and air-cargo logistics. Recycled-water use and LEED Platinum development standards form part of its environmental measures.
July 31, 2026
Show AI Summary
Regulatory and legal developments cover trade measures, legislative action, offshore exploration support, court directions and platform algorithm scrutiny.
The compilation reports proposed United States tariff measures concerning purchasers of Russian oil and gas, India-United Kingdom trade engagement, extension of farmer-support measures, and approval of offshore exploration support. It also covers passage of the Registration of Births and Deaths (Amendment) Bill, 2026, a privilege-motion notice, a criminal sentencing, and directions to appoint a nodal officer for families affected by the Russia-Ukraine war. Regulatory items include industrial credit data and examination of social-media algorithms, bias and public-order implications.
July 31, 2026
Show AI Summary
Russian oil purchases may trigger proposed targeted tariffs, with periodic reassessment based on countries' purchasing behaviour.
Proposed United States measures would authorise sanctions against Russia and persons supporting its war in Ukraine, while permitting targeted tariffs on imports from countries purchasing substantial volumes of Russian oil or gas or facilitating sanctions evasion. The framework identifies major purchasers and shadow-fleet facilitators for possible additional tariffs and provides for periodic reassessment and tariff adjustments based on purchasing behaviour. India stated that its energy-security policy rests on national priorities and diversified energy sources.
July 31, 2026
Show AI Summary
Money-laundering proceedings face challenge over absent predicate offence, alleged lack of criminal intent, and treatment of related FIRs.
Money-laundering proceedings linked to alleged diversion of homebuyer funds are challenged on the ground that no scheduled offence or criminal intent is attributable to the petitioner. The petitioner relies on his asserted exoneration in two predicate FIRs, where charge sheets did not name him, and settlement of the remaining FIR. Notice was issued for a response and status report, and the petitioner undertook to cooperate with the investigation.
July 31, 2026
Show AI Summary
Rupee appreciation reflected foreign capital inflows and central bank support, tempered by crude prices and geopolitical tensions.
Rupee appreciation against the US dollar was linked to sustained foreign capital inflows and Reserve Bank support through dollar selling. Higher crude oil prices, a stronger US dollar and geopolitical tensions in West Asia constrained further gains. A slightly positive near-term rupee bias was associated with softer dollar conditions, dovish US monetary expectations, favourable global markets and improved foreign inflows, while geopolitical risks remained relevant. Domestic equity indices rose, foreign-exchange reserves increased, and fiscal-deficit data showed the central government's position against its full-year target.
July 31, 2026
Show AI Summary
India-UK trade agreement enables duty-free access and bilateral cooperation on investment, technology, and strategic partnership.
The India-UK Comprehensive Economic and Trade Agreement provides zero-duty market access in the UK for nearly 99 per cent of India's exports and is intended to expand bilateral trade and investment opportunities. The governments committed to maximise its benefits through the Comprehensive Strategic Partnership, including cooperation on technology, innovation, security, clean energy, education and people-to-people links. Advanced technology collaboration, including artificial intelligence, is also contemplated.
July 31, 2026
Show AI Summary
Excise duty increases on cigarettes pressured profitability, while calibrated pricing and FMCG growth supported market resilience.
Excise duty increases on cigarettes affected consolidated profitability, prompting calibrated pricing and portfolio measures to protect market share and limit migration to illicit trade. The cigarette portfolio was re-architected across price points through value-accretive offerings and staggered pricing actions. Non-cigarette FMCG growth was supported by demand for packaged foods, dairy and personal-care products. Input-cost inflation was mitigated through inventory cover, commodity hedging and price-volume rebalancing amid crude-price volatility, supply-chain disruption and imported inflation concerns.

News

Back

All News

Showing Results for :
Reset Filters
No Records Found

News

Back

All News

Showing Results for : Reset Filters

Regulatory Insights into 2024 (Special Address - delivered by Shri M. Rajeshwar Rao, Deputy Governor, Reserve Bank of India - March 30, 2024 - at the India Investment Summit & Awards organised by Mint in Mumbai)

April 3, 2024

Contents
Summary
Note

Note

-

Bookmark

Print

Print

Good Evening,

It is indeed a pleasure to be here amidst this distinguished gathering. The theme of the summit, ‘Rise of the Indian Spring’, is both contextual and inspiring, reflecting not just the rising trajectory and profile of the Indian economy, but also the sentiments prevailing within the country and across the world.

As a Regulator, our endeavour always is to promote a robust and resilient financial intermediation system with an appropriate regulatory and supervisory framework. During my address today, I therefore intend to share some perspectives on how are we building the enabling regulatory frameworks to prepare Indian financial system and entities to support the nation’s growth aspirations as well as building guardrails for ensuring financial stability.

The technological developments and innovations, which we are currently witnessing hold great promise for the financial sector. They have immense potential to increase the reach of financial firms, enhance the range of product offerings and conveniences for customers, expand the ambit of finance to hitherto excluded segments with the added benefit of lower costs for delivering them. At the same time, we need to be alert to the possibilities that the new entrants into the financial services space, including FinTech firms, could significantly alter the universe of financial services providers. This could affect the degree of market concentration and competition and may give rise to new challenges.

Regulatory Principles

Regulations can be thought of as cornerstones for building trust, enabling integrity and ensuring stability in the financial sector. Regulations define the boundaries of industry conduct, while ensuring a fine balance between fostering innovation and safeguarding public interest.

Before I touch upon the specific areas of our potential focus going forward, I would like to outline a few guiding principles that usually guides us in deciding our regulatory approach. While each policy formulation focusses on addressing a specific set of requirements, having its own schema and flavour, policy makers should be guided by three broad guiding principles namely – Prudence, Proportionality and Proactiveness. Given the dynamics of the Indian financial landscape and the institutional set-up, one more principle relevant for us at the Reserve Bank is a “harmonised approach to regulations”.

Prudence in Regulations

Prudence in financial regulations refers to being cautious and sensible in managing risks within the financial system. It involves ensuring that financial institutions maintain adequate capital, hold sufficient provisions and make sound financial decisions to prevent excessive risk-taking that could lead to instability or systemic failures in the financial system.

Time and again, episodes of crisis have demonstrated that lack of prudent behaviour by one or a few entities can impact not just the entity concerned but can potentially snowball into a systemic crises. Therefore, when risk management and prudence takes a back seat vis-à-vis growth ambitions, there is an onus on the regulator to ensure effective functioning of safety nets in the form of prudential regulations to preserve financial stability and protect larger interests.

A key aspect of the RBI's prudential approach to regulation is having strong processes for supervision and monitoring of banks and other regulated entities. Through this, RBI endeavours to have a thorough assessment of the entities' financial health, risk management practices, as well as compliance with regulatory requirements. This proactive approach is intended to help the RBI to identify potential vulnerabilities and address them promptly, thereby enhance the resilience of the financial system.

Proportionality in Regulations

The principle of proportionality is a concept we have flagged previously and implemented in some of our recent regulations. It has to be recognized that overregulation in any sector could lead to increased compliance costs affecting efficiency and innovation among the market players. Accordingly, the focus is on achieving a delicate equilibrium that addresses the critical concerns without imposing undue burden on the regulated entities.

The principle of proportionality is synonymous with a nuanced strategy to ensure that the intensity of regulations correspond with identified risks. Our policy measures such as the scale-based regulations for NBFCs, tiered regulations for UCBs and tailored regulations for differentiated banks, i.e., small finance banks and payments banks are reflective of this approach.

Proactiveness in Regulations

Adopting a pro-active approach to regulations is a necessity in current times. A forward-looking approach in regulation entails identifying and analysing emerging trends so as to proactively pre-empt any build-up of risks. Additionally, it facilitates the recognition of the evolving landscape and provides valuable inputs for regulators to accommodate new developments amid evolving challenges and uncertainties.

Being proactive also means remaining attuned to market innovations and global trends. Reserve Bank has always supported and encouraged responsible innovations. However, there is always the possibility of a trade-off between regulation and innovation. As regulators of an evolving financial landscape, we need to remain alert to the spawning of new ideas/ trends in the markets, try and understand their scale, assess their potential to disrupt the market and consider interventions where and if necessary. For example, Regulatory Sandbox is one such initiative where pilot programs can be tested in a controlled environment without any fallouts. This ensures that regulations evolve concomitantly with new products/ services rather than being pre-emptive or reactive to innovations.

Harmonised approach to Regulations

Indian financial system is characterised by different types of financial institutions. Many of these entities are niche players with varying risk profiles. Therefore, they require differentiated regulatory treatment. While recognising the need to allow for differentiated regulatory treatment, we are increasingly looking to adopt the approach of “same activity”, “same risk”, and “same regulations”.

This approach enhances our oversight capabilities by providing a holistic view of the activity across the financial system. It allows for identification of systemic risks, monitoring of cross-sectoral linkages, and initiation of pre-emptive measures to address potential vulnerabilities. However, let me reiterate a point I had made earlier2 that harmonisation does not mean prescribing uniform set of regulations. In fact harmonisation entails a risk-based perspective, wherein regulatory requirements are tailored to the specific risks associated with each type of financial entity and activity. The idea is that regulatory arbitrage can not be an option exercisable by the regulated entity.

While we remain guided by these principles in framing regulations, it needs to be emphasized that in any maturing economy, the regulations must eventually graduate from a rule-based approach to a principle-based approach. The Reserve Bank too has been endeavouring to adopt principle-based regulations which means regulator would focus on setting broad principles, thereby allowing for a nuanced approach to risk management by the regulated entities. It helps in balancing flexibility with achieving regulatory objectives. However, an essential pre-requisite for the success of such an approach is a financial landscape which values discipline and compliance in both - letter and spirit. Else, the flexibility available under a principle-based mechanism might be misused. Therefore, in their own interest, the market players should support such regulatory endeavours through suitably strengthening their compliance culture and governance frameworks.

Emerging areas of Regulatory Focus

Now, let me focus on the emerging areas which are engaging our attention at present. These are not just limited to the growth of FinTechs but traverse across the spectrum of the financial services sector.

A few areas of the focus going forward would include issues of how to go about harnessing the benefits of technology, ensuring good customer service and conduct, enabling a strong governance and compliance framework within the regulated entities, reinforcing and fine-tuning existing prudential regulations and contain the risks from procyclicality in lending.

Harnessing the benefits of technology

The key area where a lot of work is underway is evaluating the use of technology in financial services and assessing how RBI as a regulator can harness the benefits of technology for greater public good. The foundation of the digital revolution of today has been built on the digitalisation push of Government of India and enabling regulations by the Reserve Bank. To give an example, the Financial Stability and Development Council - Sub Committee (FSDC-SC) had set up a Working Group in April 2016 to look into the granular aspects of FinTech and its implications so as to review and reorient the regulatory framework. Sequel that on the framework for peer to peer (P2P) lending was issued in April 2016. Further, guidelines for Account Aggregators were also introduced in September 2016. Moreover, the RBI established its Regulatory Sandbox in August 2019. All of us here are well aware about the transformation of payments space in India where we can be proud of the country’s progress and prowess.

Post covid, digital economy had got a push and adaptation rates have increased multi-fold. This has brought up newer challenges, especially in digital lending products such as issues pertaining to coercive practices, dark patterns and excessive interest and other financial charges. To address some of these issues RBI issued digital lending guidelines in 2022 to regulate such practices. Further, when industry innovated through structures like loss default guarantees, RBI supported such initiatives by issuing suitable regulations in June 2023. Reserve Bank has thus strived to remain ahead of many of its global peers in nurturing fintech innovations by way of regulations to support them from time to time.

As I have alluded to previously3 that with newer players entering the financial services space and disrupting the rules of the game, banks may become but one amongst host of entities competing to win customer’s business. Therefore, the focus of the banks as well as regulators has to pivot from intermediation paradigm to marketplace paradigm. As the consumer preferences change, banking and financial services industry would have to reorient their business models, processes and products. To cater to this change, the RBI has started its groundwork on enhanced use of technology in banking such as use cases of artificial intelligence, digital ledgers, and so on. Let me also add here that technology brings its own set of challenges in the form of data protection, cyber security, and technology-induced frauds. These are in fact areas which are increasingly engaging the attention of regulators not just in India, but also at a global level.

Strengthening Customer Service and Conduct

You all may have noticed that there has been a renewed focus on strengthening the conduct related aspects of our regulated entities. Over the last one year we have issued instructions on the responsibilities of regulated entities employing recovery agents, strengthening of conduct regulations relating to pricing for loan related products, return of loan related security documents, addressing customer grievances related to reporting of credit scoring, among others. The recent announcement for lenders to provide their borrowers a Key Fact Statement (KFS), which will be issued shortly, is also an endeavour in this direction. These regulatory initiatives are expected to foster more responsible lending conduct in lending by REs.

These efforts on regulatory front are being complemented by suitable supervisory examination of the conduct of regulated entities to ensure fair, sound, efficient and transparent delivery of banking products and services.

As we further strengthen our approach towards addressing the concerns in framing and enforcing conduct-based regulations, the guiding philosophy would be to set out minimum regulatory expectations, with the option for entities to adopt higher standards depending upon their size, proportionality and customer focus. The regulations should ensure that customers are not misled by false promises and /or do not fall prey to unfair practices.

Improving Governance and Compliance & Risk Management

Another area of focus is on improving governance in the regulated entities. If one were to choose a single expression that epitomizes banking business, it has to be ‘risk management’. This arises from multiple factors including bank’s fiduciary role in respect of depositors, their critical interaction with real economy and their role in ensuring financial stability. A strong governance framework and a robust risk management system coupled with effective oversight by the Board and the senior management provides a greater degree of complementarity to the objectives of the Regulator.

Recognising that governance is the bedrock of a sound banking system, guidelines have been issued to address several operative aspects with regard to the composition of the Board and certain committees of the Board; age, tenure and remuneration of directors, etc. The Reserve Bank has also issued guidelines on supervisory expectations and for providing sufficient authority, resources and independence to three critical assurance functions of risk management, compliance and internal audit. The Boards are expected to take an active role in identifying/ approving the head of control and assurance functions and to establish clear lines of communication between the Board and these assurance functions. Continuous assurance vetted by an independent process should give succour to the institutions managements and not just the Regulators.

Reinforcing prudential regulations

RBI will continue to rationalise and wherever required, reinforce prudential regulations to ensure that banks recognise risks in their balance sheets and proactively manage them. For example given that our financial system is largely bank driven, to make it more resilient, RBI is introducing the expected credit loss (ECL) based framework for loan loss provisioning in banks which is a forwarding looking measure and leading identifier of stress. When issued, it is expected to transform assessment of credit risk and ensure that banks build sufficient buffers through the business cycle to be able to withstand any impacts of the cyclical downturns.

Further, to facilitate the diversification of credit risk and ensure market-based credit products, enabling regulatory frameworks have been put in place. The Directions on ‘Securitisation of Standard Assets’ issued on September 24, 2021, focusing on traditional securitisation structures. Further, with a view to develop a robust secondary market in stressed loans segment, a framework for securitization of stressed assets is on the unveil.

These reforms combined with the planned rollout of revised Basel III guidelines would provide a fillip to individual institution’s capacity to support the credit needs of a growing economy and aid stability of the financial system.

Containing risks from pro-cyclical lending

Unbridled credit growth and any laxity in credit discipline or underwriting standards can be deleterious to the health of the financial entity concerned and if widespread, could give rise to systemic concerns.

From this perspective, in recent times, credit-offtake towards the consumer credit segment, especially the unsecured portfolio was observed to be quite substantial. Also, increasing dependency of NBFCs on bank borrowings was leading to regulatory concerns. Although asset quality at broader portfolio level was not exhibiting any major signs of stress, the consistent high credit growth reported in the above segments warranted regulatory intervention. Accordingly, certain quantitative and qualitative measures were undertaken from a macro-prudential perspective.

As regulators, we would want to ensure continuous vigil to mitigate risks emerging from both within and the periphery of the financial eco-system. For example, the digital lending guidelines issued by the Reserve Bank envisage that regulated entity undertakes the due diligence required for lending decisions even when the loan is being sourced through a lending service provider (LSP). The increased reliance of banks/NBFCs to identify and onboard borrowers through fintech partners should not mean lowering of underwriting standards and improper pricing of risks.

As a regulator and supervisor, we are examining the prevailing models and practices to see how best they could be leveraged for effective credit delivery, without compromising on risk management and prudential credit underwriting standards.

Concluding thoughts

I would like to stress here that what has been shared so far is an illustration of some of the key areas of regulatory focus. At the same time, there are several other aspects which continue to be on the regulatory radar. I am sure, through a collective, consultative and collaborative approach, it would be possible to frame appropriate set of policy measures to address the current and emerging challenges. Through this process, we should be able to build a stable and resilient financial system which shall meet the emerging needs of our country in an effective manner.

To conclude, let me emphasize once again that even as the financial landscape evolves and transforms, the underlying principles of good governance, robust risk management, effective compliance, customer protection and responsible business conduct will be increasingly relevant. A robust culture within the organisation which delivers financial services while embracing these principles will stand the system and the Institutions in good stead in the long run.

Namaskaar!!

---

1 The inputs provided by Pradeep Kumar, Peshimam Khabeer Ahmed and Pramanshu Rajput are gratefully acknowledged.

2 RBI Speech: No More a Shadow (of a) Bank - available at

https://rbi.org.in/Scripts/BS_SpeechesView.aspx?Id=1416

3 Changing Paradigms in the Financial Landscape - available at

https://rbi.org.in/Scripts/BS_SpeechesView.aspx?Id=1397

Topics

Acts Income Tax