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Utkarsh 2.0: Minimum Government Maximum Governance
"The strategic framework contains, inter alia, the bank’s mission, core purpose, values and vision statements, reiterating the bank’s commitment to the nation.”, said RBI in its statement
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The Reserve Bank of India (RBI) launched its Medium-term Strategy Framework for 2023-2025 titled ‘Utkarsh 2.0’. It is a document guiding the central bank’s progress toward the realisation of identified milestones.
What is Utkarsh 2022?
In July 2015, the RBI launched a strategic management program to provide a framework for all its future policies and frameworks. Under this framework, the first strategy framework titled Utkarsh 2022 was launched, covering the period from 2019-2022. It was a three-year medium-term roadmap to improve regulation and supervision by the central bank. It was built in line with the central banks globally to strengthen the supervisory and regulatory mechanism. In order to efficiently undertake the functions, an internal committee was formed, under the aegis of the then deputy governor Viral Acharya. Their task was to identify issues that can be addressed in the next three years until 2022. The agenda was to prevent a crisis to the likes of IL&FS and the issues that follow, especially regarding investor confidence.
What is Utkarsh2.0?
It is a medium-term strategy of RBI, that is, an opportunity for the central bank to recalibrate itself basis the outcome of Utkarsh 2022, from 2022 to 2025. These core purpose, which reflects the RBI’s commitments to the nation and values of public Interest, integrity and independence, responsiveness and innovation, diversity and inclusiveness, and introspection and pursuit of excellence, remain relevant and valid. However, a need has been felt to have a medium-term dynamic mission statement reflecting RBI’s responses to emerging challenges and dynamics of the economic, social, and technological environment in which we operate. “The strategic framework contains, inter alia, the bank’s mission, core purpose, values and vision statements, reiterating the bank’s commitment to the nation.”, said RBI in its statement.
The Medium-term vision statements have set out the following:
- Excellence in the performance of statutory and other functions;
- Strengthened trust of citizens and other Institutions in the RBI;
- Enhanced relevance and significance in national and global roles;
- Transparent, accountable, and ethics-driven internal governance;
- Best-in-class and environment-friendly digital as well as physical infrastructure; and
- Innovative, dynamic and skilled human resources
Why is it important?
The central bank has been serious about promoting ethical governance from the very outset. This includes the nationalization of banks in 1969, to the adoption of more recent Basel 6 norms. A greater focus on governance will attract new customers and consumers to deposit money in the banks, and promote greater investment in the country. While the Ease of Doing Business index has been discontinued, India was rapidly climbing the ranks and stood at 63 in its last edition. This initiative will only improve India’s image with companies and investors abroad. Further, this announcement comes at a time when India is assuming the presidency of G20 and showcasing their talent with respect to deploying Artificial Intelligence (AI) and Machine Learning (ML). It will also let auditing firms like EY and Deloitte know they are being watched out for, especially because it is widely believed the failure of auditing firms to carry out their task properly was one of the major reasons for the failure of IL&FS. In a nutshell, Utkarsh 2.0 would allow the central bank to both act and react proactively to confront socioeconomic challenges and take steps as soon as possible. This is made possible by the sub-committee that will constantly monitor its progress. The agenda is in line with the Prime Minister’s ‘minimum government, maximum governance’. While the government has done a lot and is doing a lot to promote ethical and transparent policy-making, a lot of work remains to be done.