The Reserve Bank of India (RBI) has completed a sweeping cleanup of its rulebook, merging 9,445 circulars into just 244 master directives. The directives have been organized function-wise across 11 categories of regulated financial entities — a move the central bank says will simplify compliance and remove overlapping guidance accumulated since 1944.
Quick take: 3,809 circulars were consolidated into the new masters, while 5,673 were declared obsolete and repealed — including the oldest circular on advances against government securities from 24 April 1944.
Inside the Consolidation: A Human-Centric Effort
Deputy Governor S.C. Murmu told reporters in Mumbai that the consolidation was deliberately not an AI-driven exercise. Instead, a team of 37 RBI officials, with inputs from every department, manually reviewed, categorized and integrated decades of regulatory instructions.
The review started in June under Governor Sanjay Malhotra, who prioritised stronger regulatory hygiene to reduce ambiguity. Murmu said the manual scrutiny helped identify circulars that had effectively been superseded by later reforms but were never formally withdrawn — a frequent source of confusion for banks, auditors and compliance officers.
Why the Overhaul Matters: Clarity for a Complex Financial Landscape
Over eight decades, RBI guidance had grown into a dense, sometimes contradictory archive. By reorganising rules into 244 function-wise master directives, the central bank aims to make regulatory obligations easier to find and follow, reducing the risk of inadvertent breaches caused by outdated or conflicting instructions.
Murmu noted the consolidation is expected to improve compliance and lower the administrative burden — particularly for smaller banks and cooperative institutions that lack large in-house compliance teams. Industry analysts say the move could also cut dependence on external consultants and clarify expectations for supervision and reporting.
Who Is Covered: A System-Wide Reset
The master directives apply to 11 categories of regulated entities, covering nearly the entire banking and financial ecosystem:
- Commercial Banks
- Small Finance Banks
- Payments Banks
- Local Area Banks
- Regional Rural Banks
- Urban Co-operative Banks
- Rural Co-operative Banks
- All India Financial Institutions
- Non-Banking Financial Companies (NBFCs)
- Asset Reconstruction Companies
- Credit Information Companies
Together, these entities service hundreds of millions of customers and oversee assets running into trillions of rupees. Regulators said bringing uniformity to their rulebooks is critical for smoother supervision, better risk management and clearer expectations as digital payments, credit expansion and fintech integration reshape the sector.
Process Highlights & Key Numbers
Officials provided a breakdown of the review: of 9,445 circulars examined, 3,809 were absorbed into the new master directives, while 5,673 were repealed as obsolete. The oldest discarded circular dated back to 1944, illustrating how historical guidance lingered alongside modern rules.
What this means for regulated firms: Expect clearer, function-oriented guidance and a single authoritative place to look for RBI requirements. Compliance teams should map existing policies to the new master directives and update internal manuals accordingly.
Implications & Next Steps
Analysts say the consolidation aligns with RBI’s broader push to modernise regulation and make supervision more forward-looking. It may also pave the way for periodic, scheduled housekeeping to prevent future build-ups of overlapping circulars.
Regulators urged all covered entities to familiarise themselves with the new directives promptly. The RBI will likely follow up with implementation guidance, FAQs and outreach so smaller institutions can adapt without undue disruption.
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