RBI Regulated Entities (Banks, NBFCs, HFCs, CICs)

implement futuristic & scalable Compliance Management Solution

Jyant Kohli
Jyant Kohli

Published on: Feb 14, 2024

Updated on: May 8, 2024

(34 Ratings)

The Reserve Bank of India (RBI) recently carried out an assessment in select Supervised Entities (SEs) of the prevailing system in place for internal monitoring of compliance with regulatory instructions and the extent of usage of technological solutions to support this function.

It observed that various aspects of this function are being carried out with significant manual intervention, thus, a need to implement comprehensive, integrated, enterprise-wide, workflow-based solutions / tools to enhance the effectiveness of this function.

Basis these findings, RBI, wide Circular dt 31-Jan-24 has directed Regulated Entities to enhance their internal compliance monitoring through the use of technology.

The circular mentions that such a software / tool should, among other things:

  1. Provide for effective communication and collaboration among all the stakeholders (by bringing business, compliance and IT teams, Senior Management, etc. on one platform);
  2. Have processes for identifying, assessing, monitoring and managing compliance requirements;
  3. Escalate issues of non-compliance, if any;
  4. Require recording approval of competent authority for deviations/ delay in compliance submission;
  5. Have a unified dashboard view to Senior Management on compliance position of the Regulated Entity (RE) as a whole.

Who all gets effected by this circular?

S.No Regulated Entity Categorisation # Entities
1 Scheduled Commercial Banks 33
2 Payment Banks 4
3 Small Finance Banks 12
4 Urban Co-operative Banks (Tier III and IV) 49
5 Non Banking Financial Companies (NBFCs) – Upper & Middle Layer 456
6 Housing Finance Companies 74
7 Credit Information Companies 4

Timelines to Comply

RBI has advised its Regulated Entities to:

  1. Carry out a comprehensive review of the existing internal compliance tracking and monitoring processes
  2. Institute necessary changes to existing systems, or
  3. Implement new systems latest by June 30, 2024

What should a Regulated Entity do now?

If you’re already using a Compliance Management Solution

RBI expects its Regulated Entities to ensure an effective solution is in place. Merely having a CMS will not help, you need also evaluate if your existing CMS is working effectively. To check its effectiveness, I recommend the following:

  1. Analyse system usage; check how many times users are logging into CMS every month
  2. Check compliance dashboards; If your overall Compliance %age is
    • >95% – it’s a healthy sign, push it for 100%
    • 90-95% – work with your stakeholders to make it work
    • 75-90% – work with your service provider to understand gaps
    • <75% - relook into your strategy, support services
    • <50% - you may need to relook at your service provider
  3. Check frequency of Regulatory Updates; Many REs are still using old age technology wherein Regulatory updates are not automated and are pushed via excels. The failure rate of such solutions is alarming.

If you’re NOT using any Compliance Management Solution

  1. Explore Lawrbit GCMS can help you be in Compliance, not just with RBI circular; but with over
  2. GCMS is an Industry leading SaaS based Regulatory Compliance Solution. It integrates Regulatory Intelligence with Risk framework.


The information provided in this article is intended for general informational purposes only and should not be construed as legal advice. The content of this article is not intended to create and receipt of it does not constitute any relationship. Readers should not act upon this information without seeking professional legal counsel.

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