On May 28, 2024, the Reserve Bank of India launched the PRAVAAH (Platform for Regulatory Application, Validation, and Authorisation) portal alongside the Retail Direct Mobile App and a FinTech Repository, in line with the requirement highlighted in Union Budget for 2023-24, to simplify, streamline, and reduce compliance costs for financial sector regulators while adhering to time limits for granting various requisite approvals.
The PRAVAAH portal is a single window mechanism for submission of application/information in an electronic format to the RBI for seeking various approvals. It consolidates 60 application forms, along with a general-purpose application and may subsequently introduce more forms.
The portal is a centralised digital approval portal and creates a database and repository of sorts, through which all the applications for various approvals are consolidated in a single place. Applicants will be able to monitor the status of their applications online, with the decision of the RBI being communicated on their registered mobile number.
Real-time validation alerts help applicants rectify errors promptly and minimize discrepancies, and there is assurance of the quality of data being submitted. The portal will significantly reduce turnaround time for processing of applications, due to provision of a standard template for applications. Therefore, through the introduction of the portal, the RBI has managed to establish an effective paperless mechanism.
The PRAVAAH portal has established a direct channel between entities/individuals seeking various approvals under the Foreign Exchange Management Act, 1999 and the RBI. Significant approvals and processes under the FEMA have been integrated on the PRAVAAH portal. For instance, the compounding process under FEMA, which often proved to be cumbersome and time consuming, can be facilitated via the portal now. Approvals for opening of Liaison Office/ Branch Office/ Project Office, and approval for acquisition of immovable property in India can also be obtained via the portal.
Streamlining of the process of seeking regulatory approvals by Non-Banking Financial Companies is a significant area which has been impacted by the PRAVAAH portal. From requesting a certificate of registration when a change in the name of the NBFC takes place, to seeking approvals for a change in shareholding of the NBFC; there are several applications have been brought under the ambit of the PRAVAAH portal.
Feedback from the users and an analysis of the issues that may arise will enable the RBI to make necessary modifications and improvements in future to make it more user friendly. We may also expect a set of FAQs to be issued based on the users’ experience on the portal. Additionally, perusal of how the general-purpose application will be used by different entities will assist the RBI in evaluating the need for addition of any further approval processes on the portal.
Authored By: Asish Philip (Partner), Bhusan Porwal (Principal Associate) and Aastha Sahay (Associate) from Lakshmikumaran and Sridharan Attorneys.
