The Leader Has Shown the Way — When Will the Followers Follow? (Legacy complexity in Indian banking)

Legacy complexity in Indian banking

A case for cleaning up our legacy MIS code burden in Indian banking

There are moments in policy that go quietly unnoticed — but signal a seismic shift in the way a system thinks.

One such moment happened recently.

The Reserve Bank of India undertook a historic clean-up of its rulebook. In a six-month consolidation drive, RBI replaced 9,446 circulars with just 244 Master Directions, subsuming over 3,800 older instructions into the new structure and scrapping 5,673 as obsolete — some dating back to the 1940s.

This is not housekeeping. This is regulatory courage — staring complexity in the eye… and deleting what no longer serves.

And as I read this announcement, one thought kept echoing in my mind:

“The leader has shown the way. When will the followers follow?”

The hidden weight we carry inside banks (Legacy)

Every bank — especially legacy banks — carries its own internal rulebook.

Not in the form of circulars.But in the form of MIS codes, reporting classifications, and dropdown lists defined 10–15 years ago… and never revisited.

Account-opening journeys today often demand dozens of fields — sometimes over 50 — per customer, especially when KYC, reporting tags and regulatory classifications are included.

And because each field is tied to compliance, reporting or risk —no one dares to touch them.

Over time, what happens?

• Dropdowns expand like a banyan tree

• Data interdependencies multiply

• Old exceptions become permanent fields

• No one remembers why half the codes exist

• And a new joiner takes months just to understand “how we capture data here”

All because we fear putting our hands on legacy.

Meanwhile, the risk of bad data quietly grows.

Reform is already underway

While RBI has cleaned its regulatory genome, a parallel operational clean-up is underway inside India’s public-sector banks.

The Government launched EASE — Enhanced Access & Service Excellence — a multi-year reform program that measures how well banks improve access, service quality, digital processes, and operational efficiency. In simple terms: EASE is about fixing the friction — reducing paperwork, shrinking turnaround times, eliminating outdated processes, and redesigning journeys to match modern expectations. Every year, banks are scored on an EASE Reforms Index, tracking progress on digitisation, automation, inclusion and tech-enabled governance.

The message is unmistakable: Legacy banking complexity is being challenged.

What happens when we confront legacy?

The results are already visible.

A large PSB redesigned a legacy service-request process using RPA: TAT dropped by 95% and productivity surged by 900%.

Under EASE Reforms, retail loan TAT in PSBs has improved from nearly 30 days to around 10 days, backed by a 15% improvement in the overall EASE index and a 26% jump in “Responsible Banking” scores within a year.

Two lessons emerge:

1️⃣ Legacy is not invincible

2️⃣ Cleaning it up has transformative outcomes

When we simplify and standardise —cycles collapse, errors fall, confidence rises.

So what stops us?

A familiar fear in every IT Steering Committee:

“What if removing a code breaks downstream reporting?”

We cling to every obsolete code…every product-tag last used in 2011…every sector-classification invented for one special case…

Just in case.

But here’s the irony:

Retaining what we don’t need is now the bigger risk.

• It breaks data quality

• It slows down digitisation

• It distorts analytics

• It adds operational cost

• It hurts compliance at the frontline

And most importantly —It blocks the future from entering the present.

A regulatory lesson for all of us

RBI didn’t say:

“Let’s add more Master Directions on top of the mess.”

They asked the braver question:

“Do we need all this anymore?”

And then, they deleted 5,673 items that were once sacred.

That is leadership.

That is accountability.

That is confidence in the future.

The invitation before Indian banks

If the regulator can rewrite its own DNA —from 9,446 fragments to 244 strands of clean code —why shouldn’t we revisit our own data DNA?

Here’s what I believe:

Indian banking stands to gain more from deleting than from adding.

Delete unused MIS codes. Delete redundant fields. Delete multi-layered dropdowns that generate confusion. Delete legacy classifications that don’t map to today’s economy.

Scraping away the past is not disrespect. It is the highest respect we can give to the future.

Because data is the raw material of decision-making. And messy data is a tax on every decision we make.

A simple starting point

Every bank can begin tomorrow:

• List all internal MIS codes & dropdown values

• Identify those unused in the past 24 months

• Retire them in phases with clear governance

• Monitor the impact on: 

  ✔ onboarding time 

  ✔ error-rates 

  ✔ data quality 

  ✔ compliance rework 

  ✔ risk-reporting confidence

Celebrate the results. Then repeat.

From thousands to hundreds. From legacy-heavy to future-ready.

The real question

Do we dare declutter? Or will we keep carrying dead weight — out of habit, not reason?

The leader has shown the way. The clean-up culture has started at the top.

It now awaits its followers.

And that follower…is us.