RBI will Use These People to Review Rules? What is RRC?

The Reserve Bank of India (RBI) has recently announced two major institutional changes: the creation of a Regulatory Review Cell (RRC), and the establishment of an Advisory Group on Regulation (AGR). These are intended to streamline, institutionalise, and make more systematic the process by which RBI regulations are reviewed, updated, or repealed. 

With a financial sector that is evolving rapidly (via fintech, digital payments, global regulatory standards, risk from AI/data, etc.), there has been growing demand for more agility, clarity, and stakeholder input in regulatory frameworks. The RRC and AGR are RBI’s response to those demands.

This article explains what these new bodies are, how they will function, what gaps they aim to address, possible challenges, and likely impacts on the financial regulatory landscape in India.

What Are RRC & AGR: Mandate, Structure, Key Features

In this section, we detail what the Regulatory Review Cell and the Advisory Group on Regulation are meant to do, who is involved, what their timelines are, and how they are structured.

• The Regulatory Review Cell (RRC) will be constituted under RBI’s Department of Regulation, effective from October 1, 2025. Its mandate is to ensure that all regulations issued by RBI undergo a comprehensive, internal review every 5-7 years.
   
• It will conduct reviews in a phased manner, meaning RBI will not attempt to review all regulations at once but over time.
   
• Alongside RRC, the RBI has formed an external Advisory Group on Regulation (AGR) to enhance stakeholder engagement. The AGR will feed industry feedback into the RRC’s review work.
   
• The AGR is chaired by Rana Ashutosh Kumar Singh, MD of SBI. Other members include:
   
  1. T. T. Srinivasaraghavan (former MD & non-executive director, Sundaram Finance)
      
  2. Gautam Thakur (Chairman, Saraswat Co-operative Bank)
      
  3. Shyam Srinivasan (former MD & CEO, Federal Bank)
      
  4. Ravi Duvvuru (former President & Chief Compliance Officer, Jana Small Finance Bank)
      
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• The AGR will have an initial tenure of three years, with the possibility of extending for another two years. It also has a provision to co-opt additional experts when required.

Why RBI Did This: Gaps & Drivers

To appreciate the significance of RRC & AGR, it helps to understand what problems RBI is trying to solve, and what pressures have been building.

• Many existing RBI regulations and master directions have historical roots; some were formulated decades ago. They may have become outdated, redundant, or less aligned with current market realities, risk profiles, technology change, global best practices.
   
• Regulation updates have often been ad hoc: via circulars, or in response to crises, or piecemeal amendments. There hasn’t always been a regular, systematised mechanism to review whether regulations are still justified, effective, or whether they impose unnecessary burden.
   
• Stakeholders (banks, NBFCs, fintechs, cooperative banks, etc.) have flagged issues such as overlapping regulations, ambiguous rules, regulatory burden, delays in getting clarifications. A process that institutionalises periodic review and stakeholder inputs is expected to help.
   
• The RBI has earlier in May issued a "Framework for Formulation of Regulations" that required, among other things, impact analysis (to the extent feasible) and public consultation (at least 21 days) before issuing or amending regulations. This shows a push toward greater transparency and stakeholder involvement.
   

Key Facts at a Glance

Here is a table summarising key features of the RRC and AGR, their membership, timelines and functions. This aims to help readers quickly see the structure and mandates.
 

From the above table, the immediate implication is that RBI is moving from a reactive or incremental model of regulation to a more planned, periodic, stakeholder-inclusive model. Over time, this could lead to fewer redundant rules, more clarity, better alignment with international norms, and lowered compliance burden.

How Reviews Will Be Conducted: Process, Criteria & Phases

Understanding how the RRC/AGR will operate in practice is important. This includes what criteria RBI will use to evaluate regulation, how feedback will be gathered, and how the phased approach may work.

• The review will consider several criteria for each regulation, such as: stated objective of the regulation; experience from supervision, surveillance and enforcement; relevance given changed economic, technological or market conditions; consistency with global/regional international best practice; judicial/tribunal orders; and possibility to reduce redundancies.
   
• Regulations will be flagged for amendment, repeal or retention depending on whether they are still serving a purpose, are redundant, overlap with other rules, or are causing undue compliance burden.
   
• The review will also examine “master directions”, RBI’s consolidated regulations, so language, structure, and format could be overhauled for clarity and coherence.
   
• Stakeholder engagement is to be built in: through the AGR, industry feedback, public comment periods (as per RBI’s earlier framework). There will also be mechanisms for regulated entities to flag regulations which they see as outdated or conflicting.
   
• Phased manner: given that there are many regulations, RBI will not attempt to review all at once; some categories may be done earlier (e.g. high-impact regulations), others later. Also, reviews will likely be staggered so that no entity is overwhelmed with changes at once. 

Challenges, Risks, and What To Watch Out For

While this initiative addresses well-recognised gaps, its success will depend on implementation. These are potential challenges and issues which may arise:

1. Pace versus quality
   Ensuring that reviews are thorough, evidence-based, and inclusive, not rushed or superficial. If RBI tries to speed through too many regulations, mistakes or unintended consequences might happen.
    
2. Balancing diverse stakeholder interests
   Different regulated entities have different capacity and resources. Large banks may have better capacity to engage; smaller banks, fintechs, cooperative banks might have less. Ensuring the AGR represents a spread and that feedback from less powerful players is heard is crucial.
    
3. Regulatory certainty and continuity
   Frequent changes or instability in regulatory framework can also create uncertainty for regulated entities. Even useful regulations, if tweaked too often, may lead to compliance costs, operational challenges.
    
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Broader Context & International Comparison

Placing the RBI’s action in a wider context helps understand its significance.

• Globally, many central banks and financial regulatory authorities have periodic regulatory review mechanisms. These help ensure that regulations remain fit for purpose in light of technological change, evolving risk (e.g. cyber risk, data risk, model risk), global interlinkages. RBI’s move is consistent with that trend.