Release of the report “Regulatory Governance: The Scope”

(Hosted in Mumbai, April 24, 2026) 

Ms Arundhati Bhattacharya is the Chairperson and CEO, Salesforce, South Asia, and former Chairman, State Bank of India. In a chat with Professor (Dr) C. Raj Kumar, Founding Vice Chancellor, O.P. Jindal Global University and moderated by Professor Subhomoy Bhattacharjee, Director, Centre for Regulatory Governance, Jindal Global Law School, during the release of the book by Centre for Regulatory Governance (CRG), she candidly spoke about how businesses and individuals is that they look for short cuts in their operations while disregarding the rules set – resulting in Regulators responding with tighter controls; how Regulators is that they get bogged down by excessive detailing as execution remains an area of concern, even as enactment of Rules and regulations remain proper in India. We present below the detailed conversation.

Q: As a former journalist, there are lots of questions in my mind for someone who led India’s largest Public Sector Bank – the SBI, and now, being the president and CEO of Salesforce. Since you have experience in both the public sector and the private sector, and sit on multiple corporate boards, where do you think we are in the Regulatory space? To what extent has India’s regulatory landscape improved? Where does India stand in terms of Ease of doing business and governance?

A: Different Regulators are in different phases of cycle. Normally I found regulators are almost always behind the innovation cycle, and rarely ahead of it. If they are ahead, they become obstacles to innovation. If they fall too far behind, they create risks for the entire system.

There are certain countries that have the right balance. Singapore’s Financial regulator, Monetary Authority of Singapore (MAS), has a Business Development Department—a rarity in the regulatory world. This department focuses on helping businesses succeed rather than just policing them. Now, SBI had permission to set up outlets in Singapore. I wanted to set up an investment banking arm there for SBI capital markets. In India, a bank cannot also be an investment bank. It has necessarily to be a separate entity. However, in Singapore, both of these licenses are given together. A bank can also be an investment bank. In order that the Singaporean operations would mirror the structure of the Indian parent companies, I requested a second, separate license, specifically for investment banking from the Business Development Department of MAS.

They made an exception for the SBI within 3 months and created a specific license category for SBI, where I could only take an investment banking license. Now, that is what I call being a true regulator, where a regulator is not only looking at ensuring that it's keeping the consumer safe, but it is also ensuring that they are empowering growth. You are actually being enabled to grow because of the regulations.

There are regulators in every field. For India, what is needed is growth, because it needs to provide that ecosystem for people to create businesses, people to create livelihoods. We have got to be all innovators. But do you have the kind of ecosystem that rewards innovation, that encourages you to scale fast and fail fast; that you can get up again and go and try again? That is the kind of environment that is required to be created. And regulators have a big role to play in all of that. The regulators need to be nudged to reward innovation rather than stifling it.

Q: It is generally said that we are an over-regulated and an under-governed country. A lot of effort is made to create regulations, but that does not automatically translate into good governance. Now, do you think that's a fair classification? And, when you look at this entire regulatory landscape from the standpoint of where you are now, do you see the challenges much more up close than how you saw it when you were in your previous avatar?

A: I think what you were saying is very correct. What happens in India, maybe this is true for all countries - if there is a shortcut that can be taken, people have a tendency of taking it. Now, what do regulators do? They try to create regulations that make sure that you can't take any shortcuts. As a result, they begin to create regulation that is not macro in its reach, but very micro. And when you make the micro-regulation, you literally tie yourselves and the business up in knots. So, while we definitely seem to be over-regulated, where we lack is in the execution of those regulations.

As an example, there are a high number of cases where SEBI orders have been overturned by SAT. What SEBI does is a quasi-judicial process. They go as per regulations and they give these orders. It focuses on the spirit and purpose of the regulations to track unfair practices.

What SAT does is a pure judicial process. So, if some specific action is not explicitly forbidden in writing, they will rule it out. Thus, they go by the letter of the law, not by the spirit of the law. Now, if SEBI wants to write regulations covering every possible aspect of abuse, so that there is no abuse of law itself, the regulation invariably will become very complex and very difficult to adhere to.

Instead, what needs to be done, as is done in many other countries is, whatever is the regulation, you try to make sure that the regulated entity has gone not only by the letter of the regulation, but also the spirit, and you act on it at the very earliest.

Matters that take 10 years to be settled here, generally are resolved within 4-5 months in the US. The fact is, we lack in our ability to execute, not in the ability to enact. The enactment of the regulation of the laws is all perfect. Where we fall down is in the execution of the same. Unless and until we improve there, it's going to be very difficult because regulation invariably will then have to address a lot of micro issues.

Q: An institution like the SBI prioritizes social equity and the democratization of financial access—essential goals for India’s development. But the aspirations of the private sector may not be like that. So, if you have to create a regulatory architecture for both the public and the private sector, what are the key aspects that a lawmaker or a policymaker need to keep in mind so that we don't end up creating conflicting regulatory imbalances with different aspirations to get fulfilled?

A: SBI was created by an act of Parliament to bring banking to the unbanked population - to the deep reaches of the country. When Jan Dhan Yojana was launched, we at SBI, had no doubts about participating in it. It was still costing us ~Rs. 260 to open each account. Now, that is not a small sum of money, if you compare it with the number of accounts we had to open - which was one per family, right across India. Our coverage till that point of time was ~58%. When we ended, the coverage was 98.7% of the population. 33% of those accounts were opened by SBI. The initiative was so successful that even the US was impressed, and the Board of FDIC asked me to come over and address them as to how we had got it done.

Now, coming to the private sector, they mention they have to report their results to the shareholders and they cannot run unprofitable operations that affect their stock prices adversely. They say I will wait for you to become viable with these accounts. Then, we will step in. So, they have no problem taking these on as customers as long as they are viable.

Thus, to ensure participation from both the sectors, initiative should be financially viable. If you don't make it sustainable for them, then you'll have to do it by fiat, i.e., by government order. Now, in this case, some will comply out of duty and others out of legal obligation. But innovation stalls - as they are acting out of obligation rather than interest. To encourage proactive engagement, we must differentiate between reasonable profit-making and profiteering. Regulation should prevent the latter, but allow reasonable profit. An operation will not be sustainable if it is not profitable.

The government created an open, free public stack of digital tools. People got these accounts, 97% of which were zero balance at the point of time of opening. Now, a lot of them started getting the direct benefit transfer. Previously, due to middlemen, the actual beneficiary was getting very less. A former finance minister had said that of every rupee of subsidy that we give to the below poverty line family, only 13 paisa actually get to them. Now, that 13 paisa suddenly became a whole rupee going to them.

The UPI platform was built free by the government and invited the private sector (GPay, WhatsApp Pay, etc.) to build apps on top of it. Everything started running on that platform. But the backing behind that, are those accounts that we opened at that point of time. What happened as a result was that the informal economy, that was in cash, started getting formalized because everybody was paying with a QR code. Now, the moment it gets into a QR code, the cash starts flowing up in your bank account. And if you have a cash flow in your bank account, and  in a month, you're making Rs 5000/-, you become eligible for a Rs 500/- loan. That loan, if taken from a money lender would have been availed at the rate of 10% per month. Now, you start getting it at 6% per annum. Imagine the difference it can make in the lives of these small people.

And that is how inclusion has worked in India. If you look at the tax ratios today, that has gone up, on account of formalization of the economy. The number of people who are accessing the formal financial system has gone up exponentially. And the lives of people, their standard of living has definitely gone up on account of the fact that this financial inclusion has taken place. So, India basically is growing from the bottom on account of all of this.

Again, has regulation played a part over there? Definitely. Has government fiat played a part over there? Definitely. Can we do better if we bring about the public-private partnership? 100%.

Look at DigiYatra today. DigiYatra is a public-private partnership. How much easier has it made your life? Where you can just walk in because your face is your identity. It's made life so much easier. So, there is a lot we can do to come up to potential. But regulators and government both have to be aware of the fact that it's good to have private-public partnership.

Q: Almost 5.5 crore cases are pending in Indian courts, which is a significant challenge we are facing. Over the last several decades, we created many regulatory bodies to reduce the burden of the courts. But the regulatory bodies are currently hollowed out by unfilled vacancies, leading to their own massive pendency. Again, appeals from the decisions of the regulatory bodies are coming back to courts and they're clogging the court system as well. Do you think that we have made a mess of the regulatory reform that we ought to have created better?

A: The present legal system often turns the entire process itself into a punishment. That affects the guilty and the innocent alike. There are lots and lots of innocent people where the process is also punishing them for no fault of theirs. To combat this, some youngsters are looking at how to circumvent this issue and come up with solutions like launching private arbitration boards to bypass the slow-moving courts.


What the arbitration board does is, it onboards, say, one large company; and then onboards all of their dealers and suppliers, i.e., those, who probably have some kind of friction with the bill payer or the receiver of money. They decide within themselves that for arbitration, they will come to a particular body. The concerned body employs a number of ex-judges, ex-regulators and specialists in those particular industries. All parties agree that they will abide by whatever award is given by the arbitrator. This has not only prevented a lot of these cases landing up in court, but also made the process fast. Unlike traditional courts, these boards provide hand-holding to identify why a dispute happened. Fixing the underlying issues ensures that the same mistake isn't repeated elsewhere in the supply chain - effectively reducing the overall caseload.


I don't know when judicial reform will happen. There are some structural limitations as the Chief Justice is appointed based on seniority. Their tenure is thus often unpredictable – from 60 days to 2 years. As reforms are deep-rooted, they need a person to be at the helm for longer than 2 years - at least 4 to 5 years, in order to bring about deep-seated reforms. That rarely happens. Therefore, you cannot really blame them either, as they don't have the time in order to bring in these reforms. I think this is one of the weak areas we have. We need to have other bodies that will arbitrate and maybe, by that manner, we can reduce the load of the courts by ensuring that all the smaller matters get taken over by the arbitrating boards.


Q: Does the reliance on former judges, lawyers and government officials in the alternative dispute resolution mechanisms in India limit its success as they tend to carry over the same procedural habits and mindsets from the earlier legal system? Has it also adversely impacted the potential for regulatory bodies playing a more positive and facilitative role? And should we consider bringing in private sector expertise to be part of regulatory bodies as members?

A: Different regulators have behaved differently. It is important not to generalize it. Some have performed excellently on account of the kind of working style that they have brought with them. Some have not been so. While it is debatable whether bringing in people with more industry expertise is needed, such expertise must be balanced with a fundamental understanding of mediation. Creating newer structures may not always be the answer. What we need is better infrastructure, better usage of the newer tools. For e.g., Artificial Intelligence. Although AI may have inherent biases, it has the ability to analyze a case study in seconds. So, we need to look at the newer tools to see whether we can do better within the framework that is already there and focus on empowering our current arbitration and judicial frameworks.   I think that is where we need to sort of focus on, rather than create more and more bodies. Because if the basic stuff doesn't change, the addition of more bodies will only create a higher number of backlogs.

Q: Unlike the private sector, regulatory bodies have much less emphasis on training and capacity-building programs, targeted for them, looking at the best practices of regulators around the world. Can we improve the quality of domestic governance by understanding international best-practice training for regulators?

A: I haven't interacted very closely with regulators other than RBI and SEBI. They do have their own training institutions and also have people going abroad on deputations in order to understand how other countries work. They attend a lot of conferences where regulators from across the world come in order to have proper interactions and understanding of what is happening where. I am not too sure about other regulators whether they have these training institutions. But given the pace of evolution that is going on in the world today, a lack of exposure to new tools and business models is a significant handicap. So, it is definitely up to the particular regulator to ensure that they are being able to access the right kinds of training, conferences and interactions, in order to ensure that they are up to date. If we are not a constant learner, we soon become irrelevant.

Q: During the merger of so many Banks in SBI, having a huge number of people, what was the big HR-related issue that you faced?

A: The biggest challenge was always the HR. Technology allowed me to address everybody by name and send them out letters.

First of all, I sent letters not only to the people that we were merging into us, but also to our people – addressing the fear of involuntary, nationwide transfers. I clarified that we had no intention of uprooting staff unnecessarily. We established a "clearing house" for voluntary transfers. This system helped us to relocate employees who had been stationed far from home—like those from the Northeast serving in Kerala—back to their preferred regions. So, having a pan-India presence helped us in positioning ourselves as giving them an opportunity for better placement, transforming a source of anxiety into a significant employee benefit.

Second, came the issue of promotions. The people in my parent organization felt that they were going to be challenged for promotions. We tried to address it by telling them that the organization had grown bigger, resulting in an increasing number of seats. Thus, it is up to them to prove their merit in order to get one of those seats. Our means of communication was direct engagement and putting up a grievance portal to answer their queries within 24 hours. We assigned Deputy Managing Directors as mentors to specific institutions. They went around wherever these banks were there in large numbers - ensuring high-level oversight and guidance. We hosted town halls in regions with high employee concentrations to reassure staff and provide transparent answers. Due to differing interfaces, we had to do a lot of training to familiarize incoming staff with our systems and platforms.

Q: Looking at bodies like the Competition Commission or the National Green Tribunal, which have lawyers, economists, scientists, environmental scientists, in addition to judges and lawyers, how essential is multidisciplinary expertise versus a purely legalistic approach for modern regulatory bodies ?

A: I think a multidisciplinary approach is very much required both for regulatory bodies as well as for companies. If you don't have that multidisciplinary approach, then you don't get the full picture. Tech experts are essential as technology now serves as the backbone of all operations. Similarly, dedicated HR specialists are vital; it is what drives the quality of the stuff that is coming out of your company. And talent that is good also needs to be nurtured.