Innovation Misinterpretation
Disheartening to see misinterpretation of norms, says RBI Swaminathan
This story was originally published at 14:23 IST on 2 September 2024
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MUMBAI - The Reserve Bank of India's regulatory frameworks have been adopting a consultative approach which has helped shape a resilient financial sector, but it is disheartening to see "innovative misinterpretation" of regulations, RBI Deputy Governor Swaminathan J. said on Saturday.
"Another narrative I would like to address today is the perception that supervisors are overly eager to impose business restrictions, sometimes being portrayed as "trigger-happy", Swaminathan said, addressing 'Banking Transformation Summit - Season 2' organised by CNBC-TV18 on Saturday. A copy of the speech was uploaded on the RBI website today.
"This misconception creates an impression that regulators are constantly looking for opportunities to clamp down on financial entities," he said.
Talking about recently issued revised norms for peer-to-peer lending, he said the new norms are intended for differentiated licencing and light-touch regulations, which will help such entities set up a unique platform and not mimic banks or non-banking finance companies that are more robustly capitalised and stringently regulated.
As per revised norms, the peer-to-peer platform shall not assume any credit risk, either directly or indirectly, arising out of transactions carried out on its platform.
"However, it is being presented in some quarters as if these 'new' regulations will 'kill' this industry," he said.
He said market players and industry should see the regulator as a partner towards a stable and prosperous financial ecosystem, not as disruptors.
"It is therefore essential to appreciate the intent behind regulations, which are designed to protect customers, ensure fairness, and maintain stability," Swaminathan said. End
Reported by Richard Fargose
Edited by Vidhi Verma
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