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RBI Regulatory Insights

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Contents

We are pleased to present the May edition of Grant Thornton Bharat RBI Regulatory Insights. This newsletter aims to provide you with comprehensive updates and insightful analysis on key regulatory development, particularly those mandated by the Reserve Bank of India (RBI).

In this edition, we have analysed the RBI's May 2024 annual report, highlighting India's economic performance in 2024, financial trends, and regulatory changes. It covers achievements in growth, inflation management, financial inclusion initiatives, and digitalisation. It also emphasizes consumer protection, foreign investment, and sustainable finance, along with key RBI regulatory updates, including revised guidelines for Irrevocable Payment Commitments.

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Previous edition
RBI Regulatory Insights
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Key highlights

  • Irrevocable Payment Commitments (IPCs): RBI amended guidelines for banks due to T+1 settlement cycles, aiming to mitigate risks and enhance capital market efficiency, aligning with capital market regulations.
  • Monetary policy operations: RBI's Monetary Policy Committee assessed global and domestic conditions to manage inflation, targeting 4%. Initiatives include GDP projection via machine learning, data streamlining, and reviewing loan benchmarks, reflecting RBI’s monetary policy in 2024.
  • Credit delivery and financial inclusion: There is emphasis on grassroots digitalisation and priority sector lending reforms. Enhanced support is being provided for FinTech and AI in digital payments to improve service delivery and foster inclusion, driving digital transformation in banking.
  • Financial markets and foreign exchange management: RBI aims to create a transparent, inclusive, and efficient financial ecosystem. Initiatives foster investment, trade, and stability, benefiting market participants, investors, businesses, and exporters, ensuring financial stability in India.
  • Regulation, supervision, and financial stability: Strengthening the financial system with a robust regulatory framework and advanced technologies like AI and ML. Measures for FY 2024-25 focus on preventing AML, improving customer satisfaction, ensuring transparency, and streamlining grievance redressals.
  • Currency management: Enhancements include withdrawing high-denomination notes, modernising infrastructure, replacing SBS machines, exploring eco-friendly disposal methods, and improving banknote/coin delivery.
  • Payment and settlement systems and IT: Advancements align with the Payments Vision Document 2025. Initiatives include expanding UPI and RuPay globally, enhancing e-Kuber, improving IT security, and planning a next-generation data centre.