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 ✕
🔎 Filters / Advanced Search ❯
TEXT

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
☰   Show Results ❯
    DRI seizes over seven kg amphetamine and three kg cocaine as it intensifies crackdown on drug trafficking in country; three arrested
    DRI seizes 13 kg foreign-origin gold worth around Rs. 19.41 crore and dismantles a gold smuggling syndicate in Gujarat; three arrested
    Department of Commerce Organises “Leveraging FTAs” Outreach Programme in Jaipur to Strengthen Export Opportunities
    Central Bureau of Narcotics (CBN) organises five drug awareness programmes for MP youth Mission Yuva Raksha
    DRI seizes massive 137 kg consignment of crystal meth; busts coastal drug trafficking network; 4 arrested in Tamil Nadu
    Optimization of Statutory Branch Auditors (SBAs) Costs and Acceleration of Centralized Audit Frameworks
    Clarification on Legislative Developments concerning Government’s shareholding in IDBI
    Introduction of e-Invoicing Facility for Recipient Generated Self Invoices under Reverse Charge Mechanism for Domestic Supplies from Unregistered Pers...
    DFS Organises Workshop on Reservation Policy for Public Sector Banks, Public Sector Insurance Companies and Public Financial Institutions
    APEDA Facilitates Export of 1.755 MT of Organic Palmyra Jaggery Powder from Tamil Nadu to Bulgaria
    Union Commerce and Industry Minister Shri Piyush Goyal Launches National Strategic Trade Command Centre at Vanijya Bhawan
    Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman participates in the 114th meeting of the Development Committee Plenary of the W...
    Customs officers detect 148.67 kg hydroponic weed from Bangkok at air cargo complex at IGI Airport
    DRI seizes around 6.2 kg foreign-origin gold; busts sophisticated gold smuggling modus operandi through unaccompanied baggage; three arrested
    Central Bureau of Narcotics (CBN) U.P. Unit holds public hearing to address grievances of opium cultivators
    Directorate of Revenue Intelligence (DRI) and Central Bureau of Narcotics (CBN) destroy 2.87 Hectares (7.08 Acres) of illicit cannabis (ganja) cultiva...
    The cumulative exports (merchandise & services) during April-September 2026-27 are estimated at US$ 476.20 Billion, as compared to US$ 418.31 Billion ...
    Union Minister of Commerce and Industry Shri Piyush Goyal Calls on Youth to Drive India’s AI Journey
    CCI approves acquisition of majority stake in Tribhovandas Bhimji Zaveri Limited by GRT Jewellers (India) Private Limited
    CCI approves the acquisition of certain shareholding in Kids Clinic India by NuageLux BidCo S.à r.l
❮
❯
❯❯
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
October 19, 2026
Show AI Summary
Narcotics trafficking enforcement led to airport and road interceptions, baggage concealment detection, seizures, and arrests under the NDPS framework.
Narcotics trafficking enforcement under the Narcotic Drugs and Psychotropic Substances Act, 1985, involved intelligence-led interceptions at Bengaluru and Delhi airports and near Nagpur. Passenger baggage and a backpack were examined, leading to the seizure of amphetamine and cocaine and the arrest of three passengers. The recoveries included amphetamine concealed in baggage, a ladies' suit and a backpack lining, and cocaine contained in transparent packets within baggage.
October 19, 2026
Show AI Summary
Gold smuggling syndicate enforcement traces concealed imports through airport handlers, illicit melting, and jewellery-market disposal under customs law.
Directorate of Revenue Intelligence enforcement action identified an organised gold-smuggling syndicate importing foreign-origin gold through Ahmedabad and Surat airports, followed by handover to handlers, intermediary routing, illegal melting, and cash-based supply through an Ahmedabad jewellery outlet. Further searches recovered undocumented foreign-origin gold bars and records concerning smuggled gold linked to a Dubai-based financier. The investigation identified interconnected roles across the movement, processing, and disposal of smuggled gold; three persons were arrested under the Customs Act, 1962.
October 19, 2026
Show AI Summary
Free trade agreement utilisation requires origin compliance, product standards, and documentation to secure preferential export market access.
Effective FTA utilisation requires businesses to identify eligible products and markets, assess tariff preferences and rules of origin, and meet applicable quality, certification, documentation and importing-country requirements. Preferential access under agreements with the UAE, Australia, EFTA countries and the United Kingdom remains subject to each agreement's provisions and implementation status. Tariff preferences may improve price competitiveness and facilitate participation in international supply chains where product- and partner-specific conditions are satisfied.
October 19, 2026
Show AI Summary
Drug prevention awareness initiatives engage students through health education, interactive activities and pledges supporting a drug-free society.
Mission Yuva Raksha advances preventive drug awareness and demand-reduction efforts among students through programmes at educational institutions in Madhya Pradesh. Sessions addressed the harmful effects of substance abuse on physical and mental health, education, family life and careers, supported by interactive learning activities. Participants were encouraged to avoid drugs, adopt healthy lifestyles, take pledges and support awareness initiatives in their schools, families and communities. Preventive education and youth engagement complement enforcement-oriented work through informed choices and community-based resistance to substance abuse.
October 19, 2026
Show AI Summary
Coastal narcotics trafficking enforcement addresses suspected maritime methamphetamine smuggling through seizure, asset recovery, and arrests under drug-control law.
Intelligence-led narcotics enforcement addressed suspected coastal storage and maritime transfer of methamphetamine to Sri Lanka. Searches recovered crystal methamphetamine concealed in foil packets within duffel bags, which was seized under the Narcotic Drugs and Psychotropic Substances Act, 1985. Searches also recovered suspected drug-sale proceeds and vehicles allegedly used in transportation. Persons allegedly involved in organising coastal export, transport, storage and logistics were arrested and remanded to judicial custody.
October 17, 2026
Show AI Summary
Centralised audit framework targets lower physical branch audit coverage while preserving regulatory oversight and maintaining remuneration.
For FY 2026-27, audit remuneration is to remain at existing levels. Member banks are advised to accelerate a centralised audit framework to improve cost efficiency while retaining comprehensive risk oversight. Physical statutory branch audit coverage should be reduced to cover 50% of total business, apart from centralised treasury audits. Audit coverage must align with SEBI listing and disclosure requirements and RBI guidelines, supported by a Board-approved policy for the centralised audit roadmap.
October 17, 2026
Show AI Summary
Promissory estoppel cannot prevent Government shareholding dilution where enacted legislation imposes no restriction on strategic disinvestment.
Government shareholding in IDBI may be reduced or divested because the IDBI (Repeal) Act, 2003 contains no restriction on dilution of the Government's stake. A proposed amendment to limit dilution was rejected and not incorporated into the enacted law. Parliamentary statements cannot override statutory text, and promissory estoppel cannot be invoked on the basis of legislative debate statements to prevent dilution of Government shareholding. Successive Union Budget speeches also reflected a policy of transformation and strategic disinvestment of IDBI Bank.
October 16, 2026
Show AI Summary
Recipient-generated e-invoicing under reverse charge enables eligible taxpayers to obtain IRNs for domestic unregistered supplies and imported services.
Eligible active registered recipients meeting the applicable aggregate annual turnover threshold may report recipient-generated self-invoices for specified reverse-charge domestic supplies from unregistered persons and imports of services. RCMDOM and RCMIMP must be selected as the relevant e-invoice supply types when reporting through an authorised Invoice Registration Portal. Submission and validation of prescribed invoice particulars would generate an Invoice Reference Number, subject to applicable GST provisions, notifications and e-invoice specifications.
October 16, 2026
Show AI Summary
Reservation Policy Implementation in public financial institutions was examined through capacity building, practical deliberations, and measures for consistent application.
Implementation of the Government of India's Reservation Policy across public sector banks, public sector insurance companies, sectoral regulators and public financial institutions was addressed through capacity building to support uniform and effective application. Deliberations considered practical implementation issues, operational challenges and actionable measures for consistent policy application, alongside related welfare measures and interactive discussion of implementation questions.
October 16, 2026
Show AI Summary
Organic agricultural export certification supports overseas market access for Palmyra Jaggery Powder through export-oriented producer linkages.
APEDA facilitated the maiden sea export of NPOP- and EU-certified organic Palmyra Jaggery Powder from Tamil Nadu to Bulgaria. The initiative seeks to diversify India's organic export basket, create market linkages for traditional Palmyra-based products, and improve producer access through export-oriented value chains. It covers organic cultivation and reports improved price realisation for participating farmers and the manufacturer compared with the domestic market. APEDA supports certified organic and value-added agricultural exports through market development, quality compliance, and overseas buyer linkages.
October 16, 2026
Show AI Summary
Data-driven trade governance enables integrated monitoring, application analysis and evidence-based policy inputs through the National Strategic Trade Command Centre.
The National Strategic Trade Command Centre provides an integrated analytics and visualisation platform consolidating trade data to monitor trade indicators, scheme performance, application pendency, processing timelines, regional trends and compliance-related parameters. It enables analysis across national trade performance, Regional Authorities, schemes, products, destination markets and individual applications, subject to role-based access permissions. Initial dashboards cover key trade-facilitation and regulatory processes, including SCOMET, export promotion schemes, certificates of origin, importer-exporter registration and restricted imports and exports.
October 16, 2026
Show AI Summary
Private capital mobilisation should use competitive financing, guarantees and risk mitigation to expand productive employment and productivity.
Private capital mobilisation is treated as essential to employment generation and productivity growth. Private enterprises, MSMEs and startups should remain central to job creation, with financing assessed by employment and productivity outcomes rather than volume. Guarantees, risk-mitigation instruments, local-currency financing and lower transaction costs are identified as means to expand affordable and predictable access to capital. Methodologies underlying governance indicators should be transparent, objective, evidence-based and responsive to diverse development experiences.
October 16, 2026
Show AI Summary
Narcotics smuggling through misdeclared air cargo triggered seizure, arrest, and ongoing investigation into concealed hydroponic weed imports.
A Bangkok-origin air-cargo consignment declared as PU Tubes was examined on suspicion of mis-declaration. Plastic spools were found to contain concealed cavities holding polythene-wrapped packets of compacted green substance, preliminarily identified as suspected ganja/marijuana and described as hydroponic weed. The concealed substance, packaging and concealment material were seized under the NDPS Act, 1985. One person was arrested, and follow-up searches produced leads for continuing investigation.
October 16, 2026
Show AI Summary
Unaccompanied baggage gold smuggling: concealed hardware and insider coordination triggered interception, seizure, and arrests under customs law.
Foreign-origin gold smuggling through the unaccompanied baggage channel involved concealment of gold within hardware items and coordinated retrieval through warehouse personnel and intermediaries. Intelligence-led interception resulted in recovery and seizure of foreign-origin gold concealed in a floor spring, metal locks, a grease gun and a door closer. The arrangement used a trolley secured by a pre-decided number-lock combination, with a warehouse staff member, mediator and receiver allegedly involved in delivery of the concealed gold.
October 16, 2026
Show AI Summary
Opium cultivation licensing grievance redressal advances through public hearings, administrative remedies, policy recording, and a planned cultivator helpline.
Opium cultivation licensing grievances were addressed through a public hearing where cultivators raised irrigation, climatic, single-plot licensing, and village-wise allocation concerns. Participants were informed of available legal provisions and administrative remedies. Requests for more licences and larger cultivation plots were considered, with policy matters recorded. A helpline is intended to assist cultivators during the 2026-27 licensing operation.
October 16, 2026
Show AI Summary
Illicit cannabis cultivation: crop destruction followed legal formalities, while investigation continues in a remote wildlife sanctuary.
Illicit cannabis cultivation was located by a joint DRI and CBN team across five stretches of remote, densely forested wildlife-sanctuary land near village Jamniapani, Shirpur, District Dhule, Maharashtra. The cultivation covered 2.87 hectares. Following requisite legal formalities, the cannabis crop was destroyed using a rotavator in the presence of Police and Forest Department officials. Investigation remains in progress.
October 15, 2026
Show AI Summary
Merchandise and services trade estimates show export growth, import expansion, and a wider combined trade deficit over the reporting period.
Combined trade estimates for April-September 2026-27 show exports of US$ 476.20 billion and imports of US$ 551.13 billion, resulting in a trade deficit of US$ 74.93 billion. Merchandise exports rose to US$ 259.89 billion, while merchandise imports reached US$ 437.53 billion. Estimated services exports were US$ 216.31 billion and services imports were US$ 113.60 billion, producing a services trade surplus of US$ 102.71 billion. September services figures are estimates, and specified earlier-period data were revised using quarterly balance-of-payments data.
October 15, 2026
Show AI Summary
Emerging technology skills and resilient supply chains are positioned as foundations for investment competitiveness and inclusive economic growth.
Ministerial policy priorities for India's trade, investment and technology agenda emphasise artificial intelligence, cybersecurity, technology adoption, manufacturing investment and lifelong skill development. Investment competitiveness is linked to political stability, resilient supply chains, and fair and transparent trading practices. The first tranche of a bilateral trade agreement with the United States has been finalised, while final contours and legal drafting continue before operationalisation.
October 14, 2026
Show AI Summary
Majority stake acquisition in the jewellery sector receives competition clearance for GRT Jewellers' purchase of Tribhovandas Bhimji Zaveri.
Competition Commission of India approved GRT Jewellers (India) Private Limited's proposed acquisition of a majority stake in Tribhovandas Bhimji Zaveri Limited. The transaction concerns entities operating in the Indian gems and jewellery market, including a private limited acquirer and a publicly listed target engaged in manufacturing and sale of gems and jewellery.
October 14, 2026
Show AI Summary
Minority shareholding acquisition in mother and baby healthcare receives competition clearance for a private equity-backed investment.
Competition Commission of India clearance authorises NuageLux BidCo S.a r.l. to acquire approximately 23% of the fully diluted shareholding in Kids Clinic India Ltd. The transaction constitutes an acquisition of a minority equity interest in a healthcare provider operating under the Cloudnine brand. NuageLux BidCo is a Luxembourg-incorporated private limited special purpose vehicle, ultimately controlled by Permira Holdings Ltd.

News

Back

All News

Showing Results for :
Reset Filters
No Records Found

News

Back

All News

Rethinking Regulations in an Interconnected Financial System (Inaugural Address delivered by Shri M Rajeshwar Rao, Deputy Governor, Reserve Bank of India – August 18, 2025 - at the DoPT MDP on Financial Market Regulations at the Indian Institute of Management Kozhikode (IIMK))

August 22, 2025

Contents
Summary
Note

Note

-

Bookmark

Print

Print

Participants of the ‘Management Development Programme on Financial Market Regulations’, Professors, ladies, and gentlemen. A very good morning to all of you!

2. At the outset, I would like to thank IIM, Kozhikode for inviting me here. It is a pleasure to address such a diverse gathering, ranging from policy veterans to important stakeholders across the financial landscape. The contents of programme span the issues around the regulatory framework of a diverse mix of entities operating in the financial markets including banks, securities firms, and insurance entities.

3. Financial markets span a wide array of products starting with money markets, G Secs, forex, equities, commodities, and derivatives. These products are traded bilaterally, over the counter, or increasingly on electronic trading platforms or on exchanges. The entities are diverse, and they are active in many of these markets. They are regulated by different regulators depending on the nature of entities and/or their activities. The markets are interconnected with spillover risks from one set of market activities into another, increasingly becoming a point of concern from the point of view of financial stability. In my remarks today, I would like to, therefore, share a few perspectives on the need for market and entity regulations and their interplay, the tools employed by the regulators and the challenges faced in framing regulations for a rapidly evolving and interlinked financial ecosystem; and conclude by sharing a few thoughts on the way forward.

The role and evolution of financial sector regulations in India

4. To set the stage, it is essential to start by tracing the evolution of financial sector regulations in India, which commenced with the establishment of the Reserve Bank of India (RBI) in 1935. The Bank’s remit was expanded in 1949 to cover regulation and supervision of commercial banks2. This was succeeded by empowering it to regulate and supervise non-banking institutions3 now commonly referred to as Non-Banking Financial Companies (NBFCs) in 19644 and thereafter Urban Co-operative Banks (UCBs) in 19665.

5. The year 1991 is extremely significant as it ushered in key economic reforms which helped to transform and grow our economy. The reforms in the financial sector started in a way, with the implementation of the recommendations of the Narasimham Committee on financial sector reforms. The entry of private banks, introduction of prudential norms for banks, and alignment of capital adequacy requirements with global standards based on the recommendations of the Committee and conferring of statutory powers to the Reserve Bank to exercise greater oversight over the NBFCs were important policy landmarks during this period. This together with the subsequent changes in the monetary policy framework6, the liberalisation of the exchange control regime and the grant of powers to regulate the Payment and Settlement Systems as well as the money, foreign exchange, and government securities (G-Sec) markets to the Reserve Bank, have collectively influenced the changes in the approach to regulation making at the Reserve Bank.

6. The Securities and Exchange Board of India (SEBI) was statutorily entrusted with regulation and development of the securities market in the year 19927. The subsequent decades saw establishment of new financial sector regulators in the form of the Insurance Regulatory and Development Authority of India (IRDAI) to oversee the regulation of the insurance and reinsurance sectors and of the Pension Fund Regulatory and Development Authority (PFRDA) for pension funds. More recently in 2020, the International Financial Services Centres Authority (IFSCA) was created to regulate and promote financial products, services, and institutions within India’s International Financial Services Centres. Collectively, these regulators play a critical role in the journey of transforming India’s financial system into a more resilient, market-driven, and consumer-centric ecosystem, while facilitating sustainable economic growth of the country.

Approach for Regulation making

7. The market-oriented laissez-faire approach towards Regulation of financial markets with minimal regulations operates on the assumption that self-regulation will be effective. However, this view has been contested by some economists and policymakers who argue that regulation is not just necessary but essential. They contend that the idea of inherently self-correcting markets is more of an ideological fad than a factual occurrence, and that effective oversight is crucial to ensure stability, transparency, and protection of the financial sector against systemic risks. Nobel Laureate Joseph Stiglitz in his influential book Freefall: Free Markets and the Sinking of the Global Economy writes, “The crisis has made it clear that self-regulation – which the financial industry promoted and which I view as an oxymoron – doesn’t work.” Time and again it has been proven that financial regulation is essential not only to prevent market failures, but also to protect consumers and safeguard the stability and resilience of the broader economy, particularly in times of crisis. The common misconception that regulation inherently imposes restrictive barriers, is inaccurate. A well-designed financial oversight framework underpinned by thoughtfully crafted regulations not only ensures a level playing field but also fosters sustainable growth and development.

How do we regulate financial systems8

8. Before delving into the specific approaches to regulation-making, it is important to first reflect on the broader frameworks for financial system regulation, especially considering that alternative models of financial oversight are in vogue.

9. The regulatory oversight architecture for financial systems can be broadly categorised into three main models. The first model is known as ‘sectoral or traditional model’, in which each of the financial sector authorities is responsible for both - prudential and conduct aspects of the specific financial sector, i.e., banking, insurance, securities and market integrity. This approach has been followed by countries like India, Brazil, Hong Kong and Mexico and remains the most commonly used model around the world. However, challenges arise in such a model while dealing with financial conglomerates, whose activities blur the boundaries between different types of financial institutions. Such trade-offs can be smoothed by introducing complementary arrangements, like those adopted by Indian Financial Sector Regulators (FSRs), which I will discuss later.

10. An alternative approach is the ‘integrated model’, where a single agency oversees all oversight functions including regulations across the finance industry. This model was adopted by Singapore in 1984 as a consequence of reforms in financial oversight architecture. Later Scandinavian countries adopted similar models, followed by the UK, which established a single Financial Services Authority (FSA) in 1997. Further, countries like Russia, Japan, Germany and South Korea have adopted this model in their financial architecture. While this approach offers a cohesive and streamlined framework for overseeing the financial sector, enabling unified decision-making, reduced regulatory arbitrage, and improved co-ordination, it may present some operational challenges like risk of possible single point of regulatory failure, dilution of sectoral focus and reduced flexibility in addressing the needs of different sub-sectors.

11. The third model involves grouping responsibilities either according to regulatory and supervisory goals or according to sectors, i.e., partially integrated approach. The ‘Twin Peaks’ model is an example of this, where two separate agencies manage each of the prudential oversight and conduct of business for all types of financial institutions. This model was first adopted in Australia in 1997, followed by Netherlands in 2002 and thereafter introduced in Canada and South Africa. After the Global Financial Crisis (GFC), the UK restructured its regulatory framework by replacing the integrated model with Twin Peaks model by bifurcating FSA in two institutions - the Financial Conduct Authority which focuses on market conduct, and the Prudential Regulation Authority (under the aegis of Central Bank) responsible for the prudential regulation and supervision of banks, building societies, credit unions, insurers and major investment firms. The Twin Peaks model leverages potential synergies arising in the prudential or the business conduct oversight of various types of financial institutions but faces similar challenges of lack of sectoral focus as in the integrated model and co-ordination challenges as in sectoral model.

12. The Two Agency model is another example of the partially integrated model where one agency is responsible for the regulation and supervision of both solvency and conduct of business for banks and insurance companies, and a second agency is responsible for market integrity and the securities business. It is currently in place in jurisdictions such as France, Italy, Malaysia, Saudi Arabia, etc.

13. The models in the United States (US) and the European Union (EU) have special characteristics. While in the US functions have been assigned to various agencies at the federal and state level, in the EU, countries within the euro zone share a single prudential supervisory authority for significant banks. More recently, after the GFC, the macroprudential policy and resolution functions were the areas which were added to the financial oversight architecture, which may or may not involve separate agencies depending on the type of model adopted.

14. Each model includes trade-offs between synergies and potential conflicts of interest and challenges. The decision to adopt a financial oversight model depends on the structure and evolution of the financial sector, legal, cultural, and political economy considerations as well as past experiences like dealing with financial crises. Whichever be the model, one of the key features of any financial oversight architecture is the Central Bank remains the primary or lead authority. Its leadership in coordinating with other regulatory entities reinforces the coherence, resilience, and credibility of the overall financial oversight architecture.

15. Let me now touch upon the approaches adopted by regulators for the regulation-making process. While there may be differing views on the most apt approach to regulations, there is no ‘one size fit all’ approach. Regulators use different approaches and tools to address varied types of problems for effective regulation.

Principle vs. Rule vs. Outcome based regulation

16. Principle based regulation is qualitative and uses high-level statements with an explanation of the underlying intent. It gives flexibility and freedom to a Regulated Entity (RE) to innovate by developing new products and services without being constrained by prescriptive rules. However, it is open to subjective interpretation and can therefore pose challenges for both REs and supervisors, thus limiting enforcement and accountability. It may also be less effective in areas like consumer protection, where clear and actionable directions are essential. In the context of Reserve Bank as a banking regulator, the Prudential Framework for Resolution of Stressed Assets9 is an example of principle-based regulation.

17. Rule-based regulation, on the other hand, requires an RE to comply with specific, prescriptive requirements. It leads to better clarity, compliance, and consistency, as it simplifies the understanding of regulations for an RE and consumer alike. However, it may lead to a ‘check-the-box’ mentality, resulting in compliance by REs in letter but not in spirit. The REs may also face challenges when dealing with complex and dynamic issues where nuanced judgment is required. The Master Directions on Priority Sector Lending – Targets and Classification10 can be considered as an example of a rule-based regulation issued by the Bank.

18. Another approach which has gained prominence of late is the outcome-based regulation, with focus on desired outcomes or results rather than prescribing specific processes and tools. This approach sets "what" is the desired outcome, while providing flexibility on "how" to achieve it. The RBI’s Directions on Digital Lending11 emphasise on the desired outcome, i.e., transparency and fairness for borrowers, rather than getting into specifics like lending rates or methods.

19. Striking the right balance amongst these approaches is critical to creating an enabling, and effective regulatory environment while encouraging innovation, given the complexities of today’s dynamic financial landscape.

Activity vs. Entity based regulation

20. Activity-based regulation prescribes regulatory obligations for specific activities, independent of the entity undertaking them. It works on the principle of “same activity, same risk, same rules”. The Directions issued on Financial Services provided by Banks12 can be categorised as activity-based regulation.

21. In contrast, entity-based regulation aims to bolster the resilience of activities with focus on the entity. This approach encompasses governance, prudential and conduct requirements, reinforced by supervisory interventions. Given that an entity’s overall resilience is shaped by the composition of its activities, entity-based regulations place targeted restrictions – an essential feature of such regulation. The prudential norms on capital adequacy are in nature of entity-based regulation.

22. Given the distinct regulatory domains, and keeping in view the objective of financial stability, regulators often adopt a hybrid approach that integrates elements of both activity-based and entity-based regulation. Such a tailored regulatory framework enhances the comprehensiveness and resilience of oversight mechanisms. It allows regulators to respond more effectively to market developments and emerging risks, thereby strengthening the overall regulatory architecture and promoting a sound, stable, and inclusive financial system.13

Rules based vs. Risk based approach14

23. Rules-based regulation focusses on adherence to regulatory prescriptions regardless of the level of risk. Though beneficial at times, the approach should factor in principle of proportionality, as not all entities carry same amount of risk to financial stability or consumer protection.

24. Adopting a risk-based approach enables regulators to frame regulations that are both effective and proportionate in the dynamic financial environment of today. This also helps in directing scarce regulatory and supervisory resources in optimal manner while also fostering innovation and financial inclusion. The Scale Based Regulation issued by RBI for Non-Banking Finance Companies (NBFCs)15 and revised regulatory framework for Urban Co-operative Banks (UCBs)16, can be thought of as recent examples of a risk-based approach.

Market vs. entity regulation

25. Market-based regulation focuses on the overall structure and functioning of financial markets, while entity-based regulation deals with the prudential norms, conduct, solvency, and internal risk management of individual financial institutions. Although each Financial Sector Regulator (FSR) such as the RBI, SEBI, IRDAI, PFRDA, or IFSCA has its distinct regulatory domain, activities of many of their REs overlap. Depending on their activities, these entities may fall under multiple regulatory frameworks, resulting in differential oversight and heightened operational complexity. For example, a mutual fund or an insurance company participating in government securities market or a bank participating in corporate bond market. To address such overlaps, FSRs are increasingly adopting a co-ordinated approach to regulation and supervision, with the broader goal of ensuring financial stability.

Challenges in regulation making

26. Regulation making is a complex process starting from identification of risks or gaps in existing regulations, evaluation of options to address them and finally coming out with an appropriate and effective regulation which is intended to address the risks for the entity and for the financial system (prudence, resilience and stability) and/or empower the consumers and ensure fair conduct amongst entities (conduct issues). While treading this path, the regulators are often confronted with many challenges. Let me highlight a few of them.

Balancing innovation and stability17

27. Innovation in the financial sector has brought about transformative changes. However, the rapid pace of innovation, also leads to regulatory gaps or grey areas. Innovations often take shape of new business models and partnerships with third parties, who are outside the regulatory ambit of the FSRs. It is the job of the regulator to plug these loopholes by framing rules in such a manner that allows innovation to thrive but provide sufficient guardrails to ensure that financial system remains stable and resilient. The regulators are therefore adopting a more agile and forward-looking approach - like the development of regulatory sandboxes and enhancing dialogue with key stakeholders for integrating the new players into the regulatory framework, while being mindful of financial stability.

Keeping pace with emerging risks and technologies

28. The regulators need to keep pace with dynamically changing markets and deal with emerging risks and technologies. This requires regulators to devise approaches to ensure that consumers are treated fairly and also ensuring the safety of the financial system, while providing space for innovation. I would like to highlight two examples of the challenges faced by the regulators.

(I) Climate risk

29. Addressing climate change not only requires transition towards sustainability, but also integration of climate related financial risks into regulatory framework. Regulators across the world are debating whether climate risk warrants a separate framework or should it be embedded within existing risk categories. There is also ongoing discussion on whether climate risk oversight should form part of Pillar 2 (supervisory review), or Pillar 1 (capital and liquidity requirements). This continues to engage the attention of the standard setting bodies, industry and other stakeholders and there is a need to strike right balance to harmonize environmental stewardship with maintenance of financial stability.18

(II) Emerging technologies

30. New technologies improve ease of doing business, reduce operational and compliance costs, but they also pose challenges for regulation. There are three primary challenges in regulating these technologies: (i) the unpredictable nature of business models that rely on emerging technologies, (ii) data privacy, security, ownership, and control, and (iii) the artificial intelligence (AI) conundrum.19 One example of new business models is Banking-as-a-Service (BaaS) model which increases scale and speed of distribution of financial products but could also lead to significant business conduct risks. Regulators face a dilemma: whether to come out with a framework before such financial innovations happen or allow markets to develop, risking unanticipated systemic risks and exploitative consumer practices.20 Additionally, regulators must navigate capacity constraints and legal complexities in crafting effective regulations.

31. Here too, we have adopted a cautious approach while coming out with regulations like digital lending directions covering partnerships between FinTechs (as Lending Service Providers) and REs, introduction of Video based Customer Identification Process (V-CIP) etc., in these emerging technology areas. The RBI had constituted a committee to develop a robust, comprehensive, and adaptable Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI) for the Financial Sector21 which has come out with a principle-based approach to AI adoption in the financial sector.

Reducing regulatory burden and ensuring compliance

32. India has made notable progress in improving its business environment over the years, however, there is still ample scope for further improvement. Regulatory burden and compliance costs pose challenges to REs, more so for smaller REs. Regulators not only need to do a delicate balancing act of reducing the burden and compliance cost for the REs but also need to ensure that it does not hinder the efficient functioning of markets. The Reserve Bank has pioneered some initiatives over time, which I would like to highlight:

  1. To reduce compliance burden, RBI had constituted a Regulatory Review Authority (RRA) in 1999, followed by establishment of the second RRA (RRA 2.0) in 2021. The RRA 2.0 led to withdrawal or repeal of a total of 1,673 circulars, and discontinuation/ online conversion/ merger of 78 returns.

  2. The ‘Connect 2 Regulate’ Platform has been introduced on RBI’s website to broaden involvement of members of the public and stakeholders in policy formulation and review, thereby making the process more consultative.

  3. The ‘PRAVAAH’ (Platform for Regulatory Application, VAlidation and AutHorisation), a secure and centralised web-based portal for any individual or entity to seek authorisation, license or regulatory approval on any reference made to the Reserve Bank has been launched to enhance the efficiency of processes related to granting of regulatory approvals.

  4. To formalise participatory and responsive regulation making and demonstrating RBI’s commitment to enhanced transparency and consultative approach a comprehensive Framework for the Formulation of Regulations was issued on May 7, 202522. It lays down broad principles for drafting, amending, and reviewing regulations by the Reserve Bank.

  5. The Reserve Bank is in the process of setting up a Regulatory Review Cell that would review all regulations every five to seven years.

Data, capacity and resource constraints

33. Another area which continues to engage the attention of the regulators is the lack of precise data to effectively formulate new policies. Rapid evolution of financial technologies has led to an exponential increase in the volume of data generated, however, challenges remain with respect to comprehensiveness, credibility, and accuracy of such information. Though regulators are equipping themselves with the latest tools and skills, the pace at which requirements are evolving is breath-taking. This requires continued capacity building within the regulators.

Inter-Regulatory co-ordination

34. As alluded to earlier, the Indian financial sector is characterised by significant heterogeneity, comprising of varied players governed by multiple FSRs, each responsible for entities operating under its purview. This demands robust and effective inter-regulatory co-ordination to facilitate consistent policy making. To address this challenge, an integrated approach to oversight has been adopted by the Financial Sector Regulators (FSRs) for financial conglomerates operating across multiple sectors, based on the ‘lead regulator’ principle. Joint supervision and periodic bilateral/multilateral discussions with such financial conglomerates are some of the tools adopted as a part of this approach.

35. The Financial Stability and Development Council (FSDC) headed by the Finance Minister and its Sub-Committee, headed by RBI Governor, where all heads of FSRs are represented, provides a platform for combined assessment of risks from the financial stability perspective and plays a pivotal role, for inter-regulatory co-ordination on the matters where there is overlap among FSRs. Such platforms help in further strengthening inter-regulatory co-ordination for wider development of financial sector in India.

36. However, there could be certain areas, such as increasing partnerships between the technological firms and the REs, where activities may fall outside the remit of any of the FSRs, exposing the REs to risks arising out of these activities. Addressing such risks, many a times becomes challenging for regulators and requires effective co-ordination among international regulators/ supervisors so that they do not lead to a systemic crisis. This remains a complex area for regulators, given the concerns around privacy, confidentiality, and enforcement.

Way forward

Principle and outcome-based approach

37. There is no perfect regulatory approach, however, principle and outcome-based regulation is generally found to be more suitable for mature markets. Nevertheless, even developed economies use rule-based framework when it comes to safeguarding interests of consumers. We, at the Reserve Bank are gradually shifting towards principle and outcome-based regulations, as it gives operational flexibility to the REs for conduct of their operations and tailor their activities to their unique needs, while adhering to the regulatory framework for delivering the outcomes expected from them.

Forward looking and proactive approach

38. Regulators are often confronted with complex challenges while framing regulations, necessitating adoption of a forward-looking approach. Addressing emerging risks calls for nuanced and adaptive strategies to ensure resilience. Regulators must adopt a more proactive mindset to help build a financial system that is both resilient and adaptable. Being proactive entails embracing innovation and fully leveraging data and technology. They need to further leverage technology to enhance their efficiency - both internal and supervisory, carry out regulatory horizon risk scanning and boost regulatory effectiveness. Usage of rapidly evolving technologies and collaboration with domain experts is need of the hour for the regulators to stay abreast of the evolving changes in the financial system.

Regulatory Impact Assessments (RIAs)

39. Regulatory Impact Assessments (RIA) are increasingly being recognised as essential tools for policy makers, enabling the development of policies that are grounded in evidence, clear in their purpose, proportionate in design, and responsive to real world conditions. These tools can be useful to strike a balance, by guarding against both unnecessary compliance burden and regulatory gaps, while boosting public confidence and enhancing international standing. Two essential elements of RIA are (i) Cost Benefit Analysis of the regulations, which can be evaluated either through qualitative or quantitative parameters or through a mix of both and (ii) consultation with a broad spectrum of stakeholders. While the latter leads to enhanced transparency, fostering trust, and improvement in the quality and effectiveness of the regulations, the former helps determine the optimal solution for addressing the problem while ensuring efficient allocation of resources.

40. Another important area is timely review of regulatory prescriptions and reporting mechanisms with a view to streamlining/ rationalising them and making them more effective. Such timely reviews not only reduce compliance requirements but also offer the regulators an opportunity to review the appropriateness of regulations in line with evolving market practices and developments. Regulators should endeavour to adopt best practices in their regulatory approaches, both ex-ante, to assess potential impact and avoid unintended consequences and ex-post, to assess actual impact and support course correction while enhancing future rule design, so that together, they ensure that regulation is both “right the first time” and “kept right over time”.

Enhancing compliance

41. The regulators should have a broader vision of enhancing compliance by REs to make it easier for them to comply with regulations. This can be done by simplifying regulations, enhancing their clarity and removing redundancies and duplications. The Reserve Bank has been emphasising on clarity in regulations and has started including examples, FAQs and illustrations as a part of its regulations for the benefit of the REs. To provide a high-level overview of the regulatory landscape and serve as a broad point of reference for general understanding of the REs, the Reserve Bank had come out with a Handbook titled ‘Regulations at a Glance’23. Further, the Reserve Bank is in the process of consolidating more than 8,000 regulations issued by Department of Regulation, under 30-35 thematic subjects. The regulators need to persist with such initiatives for enhancing the responsiveness of the REs and development of the financial sector.

International and domestic regulatory co-operation

42. Given the cross sectoral operations of entities, there is a need for the FSRs to move away from siloed, sector-specific regulations towards cross-functional principle-based regulations. This co-ordination will foster innovation and enable the REs to offer services across different domains as also ensure that they have appropriate risk management protocols. This would also help in capping regulatory arbitrage, while simultaneously reducing compliance requirements for the REs. Additionally, co-operation among regulators across jurisdictions is essential for sharing insights, expertise, and resources to enable more efficient regulation without compromising on quality.24 International standards serve as a valuable reference point; however, they must be adapted to local contexts and conditions, as a 'one size fits all' approach is neither practical nor effective in today’s diverse regulatory landscape.

Consumer centricity

43. We need to consider the impact that regulations can have on one of the most important stakeholders in financial system i.e., consumers. Regulators have remained conscious of the need to empower consumers and safeguard their interests. To advance this objective, they must think beyond conventional approaches. Behavioral economics offers a powerful tool in this regard, providing valuable insights into consumer behavior and decision-making processes. It equips the regulators with an advanced set of policy instruments, most notably, behavioral nudges25, which can complement conventional regulatory frameworks by achieving the desired outcomes at far lower compliance costs, thus presenting a more efficient and socially beneficial policy alternative.26

Conclusion

44. Regulatory policy in the financial sector must strike an optimal balance between the critical need for stability and objectives of fostering innovation, efficiency, and competition. While it is necessary to minimise systemic risks and protect consumers, it should not discourage creativity, innovation, or healthy market dynamics. On the other hand, an overemphasis on innovation and competition - without adequate safeguards - can lead to financial instability, resource misallocation, and ultimately loss of confidence in the system. Finding this right balance is particularly important for India, given the immense size and heterogeneity of economy, growing aspirations, and substantial investment needs to sustain high growth and development. The regulators must consistently strive to achieve this equilibrium. As Mahatma Gandhi said, “You may never know what results come of your actions, but if you do nothing, there will be no result.”

Thank you once again for the opportunity to share my thoughts with you. I wish all participants an enriching and successful deliberations in the programme.

----

1 Inaugural Address delivered by Shri M Rajeshwar Rao, Deputy Governor, Reserve Bank of India – August 18, 2025 - at the DoPT MDP on Financial Market Regulations at the Indian Institute of Management Kozhikode (IIMK). Inputs provided by Chandni Trehan Saluja and Nilesh Dnyanoba Gawade are gratefully acknowledged.

2 https://rbi.org.in/history/Brief_Chro1935to1949.html

3 Act 055 of 1963: Banking Laws (Miscellaneous Provisions) Act, 1963 (https://www.casemine.com/act/in/5a979d964a93263ca60b70c7)

4 Chapter IIIB of RBI Act, 1934.

5 https://rbi.org.in/history/Brief_Fun_UrbanCoopBanks.html

6 From abolishing to automatic monetization through ad-hoc T bills to Multiple Indicators approach from 1998 to 2009, followed by a transition period with pre-conditions to kick in inflation as the nominal anchor guided the monetary policy from 2013 to 2016 and, thereafter, the Flexible Inflation Targeting framework: https://rbi.org.in/commonman/english/Scripts/speeches.aspx?Id=3161

7 SEBI was established in 1988 as a non-statutory body for regulating securities market.

8 https://www.bis.org/fsi/publ/insights8.htm and
https://www.researchgate.net/publication/290574692_Approaches_to_Financial_System_Regulation_An_International_Comparative_Survey

9 https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11580&Mode=0

10 https://rbi.org.in/scripts/NotificationUser.aspx?Id=12799&fn=2754&Mode=0

11 https://rbi.org.in/Scripts/NotificationUser.aspx?Id=12848&Mode=0

12 https://www.rbi.org.in/scripts/BS_ViewMasDirections.aspx?id=10425

13 https://www.fsb.org/uploads/P160724-2.pdf and https://www.bis.org/fsi/fsipapers19.pdf

14 https://www.fsb.org/uploads/P160724-2.pdf

15 https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=12550

16 https://rbi.org.in/Scripts/NotificationUser.aspx?Id=12416&Mode=0

17 https://rbi.org.in/Scripts/BS_SpeechesView.aspx?Id=1453

18 https://www.bis.org/review/r231115f.pdf

19 https://digitalregulation.org/3004297-2/

20 https://www.bis.org/review/r231115f.pdf

21 https://www.rbi.org.in/Scripts/PublicationReportDetails.aspx?UrlPage=&ID=1306

22 The key processes include (a) public consultation through issuance of a draft and a statement of particulars highlighting inter-alia the objective of the regulation, (b) impact analysis (to the extent feasible), (c) issuance of general statement of response to the public comments received, and (d) periodic review keeping in view aspects such as the stated objectives, experience gained, relevance in a changed environment, and the scope for reducing redundancies.

23 https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=59862

24 International Regulatory Co-operation – Policy Brief by OECD April 2020

25 According to Thaler and Sunstein (2008, p. 6), a nudge is any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid. Nudges are not mandates.

26 https://behaviouraleconomics.pmc.gov.au/blog/more-nudges-value-behavioural-economics-regulation

Topics

Acts Income Tax