Balancing Innovation and Regulation: A Path Forward

RBI Deputy Governor Swaminathan J urged regulators to collaborate in minimizing regulatory overlaps and closing gaps to foster innovation. He highlighted the complexities in modern businesses, stressing the need for balanced regulations that are adaptable to market advancements while safeguarding against conflicting rules.

At the recent Gatekeepers of Governance Summit, RBI Deputy Governor Swaminathan J highlighted the importance of collaboration among regulators to minimize 'harmful overlaps' in business regulations while fostering innovation. He emphasized the need to address regulatory gaps without stifling new business models and technologies.

The interconnectedness of modern business often leads to complex regulatory maps, involving a range of oversight from company law to data and cyber requirements. Overlaps, Swaminathan stated, can sometimes provide additional safety nets, but conflicting rules and duplicated compliance remain concerns that require careful management.

Swaminathan called for a balance between entity and activity-based regulation and urged regulators to scale requirements according to risk and market complexity, leaning towards outcome-based regulation tailored to market maturity.

(With inputs from agencies.)