RBI DG proposes training institute for regulation-making

Reserve Bank Deputy Governor M Rajeshwar Rao called for setting up an institute to train officials involved in regulation and policy-making to ensure more comprehensive guidelines.

“I think maybe it is time that we should look at the theoretical framework for regulation making and training for regulation making, which is a critical aspect and should be incorporated by all the sectors. Maybe there is a need for a training institute to look at this issue,” Rao said.

He was speaking at the ‘Gatekeepers of Governance’ Summit, organised by Excellence Enablers, on Thursday.

Regulations need to be far-sighted or foresighted and need proper drafting to cover different situations. As such, better quality of regulation-making can only be made possible with better training and skilling of the staff that are engaged in regulation-making, said Rao, adding that this is true not just for the RBI, but across regulators and sectors.

“As we increase the tribe of regulators with the increasing remit across various sectors, what is important is that there needs to be greater study and understanding of the theoretical approach for regulations, what kind of regulation is preferred under what circumstance, and also there is a need for increasing the training of many of the regulators because regulation making is now becoming an art.”

Rao said that the central bank has the responsibility to make subordinate legislation under a wide spectrum of statutes, for which the regulator needs to ensure that instructions are within the perimeters set by the statutory mandate, clear in language, appropriate and proportional.

“Therefore, we have increased our focus on providing suitable training and skills to our officers so that the regulations can be written in simple language and there is better clarity on the regulatory intent,” he said.