Indian panel proposes unified regulator for financial services

Monday, 25 March 2013 01:08 - - {{hitsCtrl.values.hits}}

Reuters: A panel set up by the Government has proposed a unified regulator for markets, insurance, commodities and pensions, while monetary policy and banking would remain under the Reserve Bank of India (RBI), local media reported on Saturday.

The Financial Sector Legislative Reforms Commission (FSLRC) has also backed the creation of an independent debt management office to manage the Government’s debt and borrowings, now overseen by the RBI.

The FSLRC, set up in March 2011 to suggest changes to financial sector laws and headed by retired Supreme Court Judge B.N. Srikrishna, submitted its report to Finance Minister P. Chidambaram on Friday.

He is expected to brief the Prime Minister and make the report public within four days, The Economic Times reported.

The panel has proposed a Unified Financial Agency (UFA) to subsume the Securities and Exchange Board of India, Insurance Regulatory and Development Authority, Pension Fund Regulatory and Development Authority and Forward Markets Commission.

The newspaper report said Srikrishna told reporters that the panel did not feel that the Central Bank should be merged with the UFA, but that could happen at a later date.

The panel has also sought to replace multiple regulations with a single Indian Finance Code and proposed a Financial Sector Appellate Tribunal that would subsume the Securities Appellate Tribunal and hear appeals against the RBI for its regulatory functions.

The panel has backed the creation of a Resolution Corporation that will oversee financial institutions and a Financial Redressal Agency to address consumer complaints against financial sector companies.