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RBI to Merge 8,000 Rules, Launch Review Cell to Ease Compliance

The Reserve Bank of India (RBI) is taking steps to simplify its regulatory framework by merging over 8,000 rules into a cleaner, more organised format. RBI Governor Sanjay Malhotra, speaking at the Modern BFSI Summit on July 25, said the aim is to make compliance easier and improve transparency across the financial sector.
Outdated Rules to Be Removed
Of the 8,000-plus existing guidelines, around 5,000 are outdated or no longer needed and will be dropped. The remaining 3,000 will be streamlined and arranged under a clearer structure. The central bank plans to group these into 33 subject areas, making it simpler for banks and NBFCs to follow them.
Malhotra said the focus is to issue one consolidated circular for each category of regulated firms, such as banks and NBFCs. This move is expected to remove overlaps and reduce the burden of repetitive checks and documentation.

Cutting Down Internal Burden
Many banks today deal with over 100 board-approved policies, which Malhotra said takes up time that should be used for strategic work. By cleaning up and combining rules, the RBI hopes to shift the board’s focus back to long-term planning and better decision-making.
Some changes are already in motion. The RBI has trimmed the number of regulatory returns that banks must submit, helping to ease routine compliance.
New Review Cell Every 5–7 Years
To ensure that regulations stay relevant, a dedicated cell will review rules every five to seven years. This team will assess whether each rule still serves its purpose and check if it meets current needs in terms of financial safety and customer protection.
Malhotra noted that the RBI has formalised a system for reviewing regulatory impact. New rules will now be analysed for both cost and ease of following them before they are rolled out.
Conclusion
This overhaul is a major move towards easing regulatory fatigue in the financial system. With more straightforward rules, banks and NBFCs can spend less time on paperwork and more on innovation and service. The RBI’s plan could also help the sector adapt more quickly to changing financial risks and consumer needs.
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