RBI Forms Expert Group To Streamline Regulations

Introduction

The Reserve Bank of India is creating a new Regulatory Review Cell, which will start its work on October 1, 2025, to update and strengthen its supervision framework. In addition, the RBI has also set up an independent Advisory Group on Regulation, which will include outside experts to bring in fresh viewpoints on regulations. This group will give a formal channel for the industry and stakeholders to share feedback with the RRC, helping ensure that rules do not become outdated and continue to stay aligned with the fast-changing financial sector.

Setting up of the Regulatory Review Cell

The Reserve Bank of India (RBI) has traditionally employed a reactive regulatory approach, which has resulted in an accumulation of rules that are considered outdated, unnecessary, and at times contradictory, creating a heavy compliance burden for financial institutions, particularly smaller non-banking financial companies (NBFCs) and cooperative banks. The RBI regulatory system has had difficulty keeping up with technological advancements, including artificial intelligence (AI), digital lending, and blockchain, and there has been no formalized method for stakeholders to provide feedback on a regular basis.

To address this situation, the RBI has set up the Regulatory Review Cell as well as the Advisory Group on Regulation. This is a new approach that brings a systematic and cyclical review process to all guidelines, as a tool to make sure the regulations are clear, relevant, and responsive. This modernization initiative is intended to ensure the overall regulatory approach is appropriate and flexible in relation to the fast-paced changes in financial systems.

From 2025, the Reserve Bank of India will launch a Regulatory Review Cell (RRC) to update its financial rules, which over time have grown complicated, outdated, and difficult, especially for smaller institutions. Recognizing that many rules have not kept pace with technological advancements like AI and digital banking or global standards, and noting the lack of structured stakeholder feedback, the RRC will provide a solution.

Conslusion

Ultimately, the Regulatory Review Cell is a proactive step towards creating a financial system that is resilient, effective, and open to innovation. The RBI is balancing stability with growth by consulting with stakeholders and considering the sporting regulation. This development is not only a regulatory concern but also promotes the responsible innovation of digital banking, fintech and technologies in the financial services system for the benefit of consumers. The Regulatory Review Cell will help facilitate the development of public trust, reduce regulatory burden and create space for innovation. Fundamentally, the Regulatory Review Cell reflects a vision of a banking sector that evolves through time and technology to protect people’s interests. Creating the foundation of extending financial services into a financial ecosystem that includes a more inclusive and future-ready financial system.