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The banking sector is overburdened with compliance burden. In this context, discuss the role and the areas of focus, of the second Regulatory Review Authority (RRA 2.0).

Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

4. The banking sector is overburdened with compliance burden. In this context, discuss the role and the areas of focus, of the second Regulatory Review Authority (RRA 2.0). (250 words)

Difficulty level: Moderate

Reference: Live Mint

Why the question:

RBI sets up advisory group to assist regulatory review authority

Key Demand of the question: 

To understand the role and scope of working of RRA.

Directive word: 

Discuss – This is an all-encompassing directive – you must debate on paper by going through the details of the issues concerned by examining each one of them. You must give reasons for both for and against arguments.

Structure of the answer:

Introduction:

Begin by mentioning about the numerous regulations to be followed by the banking institution and the inherent compliance burden.

Body:

First, mention the impact of overburdening of compliance in the baking sector.

Mention about the various areas of focus of RRA such as Mandatory fund raising via bonds, Rethink poorly drafted guidelines, Priority-sector lending etc and probable means to achieve the same.

Conclusion:

Conclude by saying that the focus of RRA must be to streamline various regulations harmoniously without ambiguity to ensure easy compliance.