RBI Deputy Guv pitches for institute to train regulators across sectors

Mumbai: Reserve Bank Deputy Governor M Rajeshwar Rao on Thursday pitched for creating a dedicated institute to train regulators across sectors.

Regulation has to be far-sighted and requires fine drafting which makes it a fine art, Rao said, stressing the need to focus on training and skilling of the practitioners.

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

Rao said the country is increasing the tribe of regulators across sectors and hence, there is a need to study the theoretical approach to regulation that encompasses understanding what kind of regulation is preferred under what circumstances.

The career central banker also made it clear that he is not confining himself just to the RBI and added that the need for training of regulators is across sectors.

Rao said the Digital Personal Data Protection Act, 2023 passed by the government is necessary for safeguarding individual’s rights and ensuring responsible handling of personal data, and asked banks and financial institutions to undertake necessary efforts to comply with the new law.

“To manage this transition smoothly, financial institutions must invest in robust data governance frameworks, (and) ensure that they and their data processors collect, process and store data in complete adherence to the laws and the regulations,” Rao said.

He said the transition to “more data conscious and more data cultured institutions” is treading on a “delicate path”.

Making the case for the need to regulate, Rao cited the case of digital lending, which witnessed an explosion in recent times but resulted in some mishaps that forced the RBI’s

intervention.