the industry at that time, i can personally attest to the regulator's responsiveness and sensitivity of the industry's concerns. the implementation of various recommendations of rra 2. 0, coupled with the tireless efforts of the many inter departmental groups within reserve bank, has already led to the issuance of several harmonised, consolidated and updated master directions as well as withdrawal of over 1, 000 circulars, apart from doing away with many regulatory and supervisory returns that have become redundant. these measures have significantly reduced the compliance burden on the regulated entities. towards ensuring good governance history is replete with examples, both in india and abroad, as to how apparently successful business ventures quickly folded up due to poor governance and excessive greed. therefore, the reserve bank has taken up this as one its focus areas to create awareness as well as to ensure adherence to good corporate governance practices. we are having more frequent and direct engagements with boards and top management of regulated entities as well as self - regulatory organisations. through these dialogues, we share our concerns and priorities, and also strive to understand the challenges faced by the industry so that appropriate regulatory measures can be taken up. instilling a culture of compliance an essential element for sustaining longevity of financial institutions is that a culture of compliance should prevail across the institution. the recent direct engagement with the heads of assurance functions as well as cfos and auditors is testimony to reserve bank's efforts to strengthen the internal defence mechanisms within our financial institutions. the independence and professional conduct of assurance functionaries, strongly backed by the board and top management is essential to preserve this culture. i am glad to share with you that these initiatives have been very well received and i would like to thank the heads of our financial institutions for prioritising these initiatives in their organisations. industry is cyclical, this is the best time for prudent and decisive action the financial industry, like any other sector, experiences cycles, and it is currently riding a high wave. therefore, this is the right time to strengthen our institutions, enhancing their financial and operational resilience, and ensuring the long - term stability of our financial system. for those wondering why now, i emphasize that taking decisive action now, even if it means swallowing some bitter pills, is crucial to ensuring our financial institutions remain strong enough to support the national goal of becoming a developed economy by 2047. 2 / 5 bis - central bankers'speeches it is not only important to simplify, harmonise and

is the perception that supervisors are overly eager to impose business restrictions, sometimes being portrayed as " triggerhappy. " this misconception creates an impression that regulators are constantly looking for opportunities to clamp down on financial entities. we are sometimes asked by the media, " who is next? " - implying that supervisory actions are routine in nature. in reality, the decision to impose business restrictions is never taken easily. strong supervisory actions are brought in only after careful onsite examinations, offsite data analysis, and extensive engagement with the regulated entities concerned for remediation, often times stretching into several months. our primary goal is to ensure the stability and integrity of the financial system and not to hinder business operations. out of the over 150 banks, over 9, 000 non - banking financial companies as well as about 1, 500 ucbs and other entities we supervise, stringent actions have been taken only in a handful of cases. that too, the most outlier in each category has been called out for such punitive actions so that it has a demonstrative effect on the rest of the industry. these measures are not about penalising but rather about protecting the interests of depositors, customers, and the broader financial system. 4 / 5 bis - central bankers'speeches despite these efforts, it is disheartening to see innovative misinterpretation of regulations. a recent case in point is that of peer - to - peer ( p2p ) lending regulations. the regulations as originally conceived, envisaged the platforms to function like online marketplaces connecting lenders with borrowers, with no credit risk borne by the platform and no co - mingling or retention of funds. however, the supervisory findings over the last one year revealed that some of these platforms adopted practices which were violative of both the letter and spirit of the regulations. instructions issued earlier this month on p2p lending platforms are nothing new but are merely responding to the egregious violations observed in some cases. however, it is being presented in some quarters as if these'new'regulations will'kill'this industry. on the contrary, the differentiated licensing and light touch regulations that were granted to such entities are intended to help them set up a unique platform and not mimic banks or nbfcs that are more robustly capitalised and stringently regulated. conclusion in conclusion, despite occasional brickbats, regulatory frameworks have been adopting a consultative approach which has helped shape a resili