Reserve Bank of India (RBI) Deputy Governor Shirish Chandra Murmu said regulation in the digital era must achieve the right balance between durability and responsiveness. He made these remarks while addressing the 3rd Annual Global Conference of the College of Supervisors on Friday.
Murmu said new applications and business models are emerging at a faster pace, creating challenges for regulators in terms of both the suitability and speed of regulatory responses. He warned that “frequent changes to regulations can create uncertainty and compliance fatigue, while delayed adaptation risks leaving material developments inadequately addressed.”
He noted that digitalisation is blurring traditional regulatory boundaries, as many financial activities are now unbundled and delivered through non-financial platforms. These platforms often involve a mix of regulated and unregulated entities, making them difficult to fit within the RBI’s existing regulatory framework.
Murmu said oversight of such activities is often split across multiple financial and non-financial regulators. “Oversight of these activities is often fragmented among multiple financial and non-financial regulators, with no single authority having a comprehensive, end-to-end view of the entire activity chain and risk transmission pathways,” he said. As a result, regulatory actions taken within individual mandates may be effective on their own but may not fully address cross-sector risks when viewed collectively.
He added that fragmentation across jurisdictions further complicates the supervision of digital financial activities. Variations in legal frameworks, institutional responsibilities, and domestic policy priorities can lead to differing regulatory approaches. This, he said, creates room for regulatory arbitrage and uneven risk management, highlighting the need for stronger cross-border cooperation.
Murmu also pointed out that while digital tools pose new regulatory challenges, they also offer opportunities. These tools can help regulators better observe, assess, and respond to emerging risks. He stressed that regulatory efforts must remain firmly anchored to core objectives, including financial stability and customer protection.
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