New Delhi, Apr 8 (KNN) The Reserve Bank of India (RBI) has unveiled a set of developmental and regulatory policy measures aimed at enhancing ease of doing business, strengthening capital frameworks, and deepening financial markets, following decisions of the Monetary Policy Committee.
The measures span four key areas, regulations, supervision, payment systems, and financial markets, reflecting a broader push towards streamlining compliance and improving financial system efficiency.
Capital Adequacy Norms Simplified
Among key regulatory changes, the RBI has proposed to ease norms governing the inclusion of quarterly profits in the Capital to Risk-weighted Assets Ratio (CRAR) computation for commercial banks.
The central bank plans to remove the existing condition that restricts inclusion of profits if provisions for Non-Performing Assets (NPAs) deviate beyond a specified threshold.
In another move, the RBI has proposed to dispense with the Investment Fluctuation Reserve (IFR) requirement for commercial banks, citing existing prudential norms such as capital charge for market risk and revised investment valuation frameworks.
The guidelines for other categories of banks will also be revised to address operational challenges and improve regulatory consistency.
Board Governance and Compliance Rationalisation
To enable more focused decision-making, the RBI has undertaken a comprehensive review of instructions related to matters placed before bank boards.
The proposed rationalisation aims to improve board-level engagement on strategy and risk governance by reducing procedural burdens.
On the supervision front, the RBI has consolidated over 9,000 regulatory circulars and guidelines into 238 Master Directions in 2025. Building on this, it has now released a draft Master Directions covering supervisory instructions across multiple functional areas, aimed at reducing compliance costs and enhancing clarity.
Boost for MSME Financing via TReDS
In a significant step to improve access to working capital for micro, small and medium enterprises (MSMEs), the RBI has proposed simplifying the onboarding process on the Trade Receivables Discounting System (TReDS).
The central bank plans to remove the due diligence requirement for MSMEs during onboarding, which is expected to encourage greater participation and improve liquidity access.
Term Money Market to be Deepened
To strengthen monetary policy transmission and improve market liquidity, the RBI has announced measures to expand participation in the term money market.
The revised framework will allow non-bank entities, including All India Financial Institutions (AIFIs), Non-Banking Financial Companies (NBFCs), and corporates, to participate in this segment. Borrowing limits for standalone primary dealers will also be enhanced.
Draft Guidelines for Public Consultation
The RBI noted that draft directions for several of these measures will be released shortly for public consultation, signalling a consultative approach to regulatory reforms.
The latest initiatives underline the central bank’s continued efforts to balance regulatory simplification with financial stability, while supporting credit flow and market development.
(KNN Bureau)
2012-01-26
