NAVIGATING COMPLIANCE RBI'S JUNE 30TH DEADLINE FOR NBFCS – ARE YOU PREPARED?

June 30th would mark the deadline given to NBFCs operating in India by RBI in its circular directing them to implement an online compliance management tool that includes the prescribed features . This circular was released towards the end of January and LegalTech Buzz had picked it up for its March edition. You can read it here .??

The fact which makes this circular a key development in compliance management is prescribing the use of an online system – and even mentioning the kind of features it should have. Thus, in essence it not just tells the NBFCs to adopt an online method, but also tells them what to look for i.e. what is required in an online compliance management system to make it the correct choice.?

This is nothing but a cue to the rapidly increasing requirement of intervention of technological advancements into managing compliances for an organisation. Regulators are advocating for the adoption of digital means of operations and soon other industries are likely to follow suit. It is thus in the best interest of all organisations to not wait for the final hour of the regulatory authority mandating the use of online tools, and to adopt the most suitable one at the earliest and avoid shock adoption later.?

Below are few industries mentioned that stand to gain manifold by the adoption of online compliance management systems:?

Hospitality?

Hospitality sector has multiple elements to ensure updated compliance with. These include food safety regulations, health and hygiene standards, licenses and permits (use of elevators, serving alcohol etc.), labour laws, accessibility for all (disabled friendly), environmental regulations (waste management, pollution etc.) and data protection among others. This means, that there are multiple laws, rules and regulations applicable to a hospitality organisation, whereby non-compliance can mean penalty imposition from multiple regulators. An online compliance tool will not only help organisations in the hospitality industry with ready lists of compliances to abide by but also keep a track of all compliances filed and their status – in process, delayed, penalty imposed etc.?

Pharmaceutical?

For pharmaceutical industry, regulatory compliance does not just end at chemical and infrastructure, but also includes quality control, document management, workplace safety, clinical trials, data security etc. All of this combined results into a massive broad landscape to navigate for the compliance professional to regularly analyse and compile applicable compliances, and then additional time to perform them all. In addition to this, the usual compliance ethics of document maintenance and approvals are also performed leading to the requirement of a wider time window for the performance of a compliance task. However, with an online compliance management tool, much of these repetitive tasks will be automated which will save a lot of time and manual effort for the compliance professional.?

Automobiles?

Regulatory compliance is a top priority for automotive manufacturers and suppliers alike. Regulations governing vehicle safety, emissions, and consumer protection can be complex and constantly evolving, which makes staying compliant not an easy feat. An online compliance monitoring system will enable manufacturers to stay abreast of regulatory changes and ensure that their vehicles meet the required standards. By streamlining compliance processes, the tool will help manufacturers avoid costly fines and legal disputes while also enhancing consumer trust in the industry's commitment to safety and sustainability.?

Insurance?

Insurance is an industry that deals with customers directly very often. This places them in a unique position wherein they not only have to ensure compliance with the applicable laws, but also ensure that their public image remains well with timely reports and audits. An online compliance management system will take care of this entire cycle effortlessly. With ready checklists of different types, to document management, to accuracy escalation, to quick overview and reports – online compliance management tool allows for all of this and much more.?

Conclusion?

Technological interventions into our lives and professions are here to stay. The RBI circular is only a start to the many more of such circulars and requirements to come. This is entirely because the adoption of technology into our daily operations are much more beneficial than if the same operations were to be executed in the traditional manual manner. An online compliance management system not only helps with the operations by saving time and manual effort required, but also allows the user to gain insights into their own operations in interactive manner. The final cherry on top is the environment friendly nature of it all eliminating the use of paper and shifting to online documents.