RBI will implement major regulations in phased manner, says Governor

Consultative process in making regulations will continue: Sanjay Malhotra

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The Reserve Bank of India will give major regulations “sufficient time for transition” and implement them in a phased manner, said Governor Sanjay Malhotra on Friday.

 

Pending proposed regulatory changes include liquidity coverage (LCR) ratio, expected credit loss (ECL) framework for provisioning by banks, and the prudential norms governing projects under implementation. Proposed regulations on LCR and ECL are expected to be effective from April 1, 2025.

 

“We will also ensure that the implementation of such regulations is smooth; we will give sufficient time for transition and where regulations have major implications, the implementation will be done in a phased manner,” said Malhotra.

 

There is a tradeoff between stability and efficiency in formulating regulations and the RBI will strike the right balance between the two, he said.

 

“We recognise that just like there are no free lunches, regulation to enhance stability and consumer protection too is not devoid of costs…. I also want to reassure all stakeholders that we will continue the consultative process in regulation-making. The suggestions of stakeholders are valuable and we will give serious consideration to them before taking any major decision.”

 

Malhotra said the system-level financial parameters of scheduled commercial banks continue to be healthy, with credit deposit ratio in the banking system at the end of January 2025 at 80.8 per cent and banks having sufficient liquidity buffers.