Merge SEBI, IRDA, PFRDA, FMC: Panel

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Agencies: New Delhi, Oct 01 2012, 20:20 IST

A government-appointed panel has proposed a super regulator for the financial sector which would subsume the functions of key agencies like SEBI, IRDA, PFRDA and Forward Markets Commission (FMC).

The Approach Paper brought out by Financial Sector Legislative Reforms Commission, headed by former justice B N Srikrishna, has also suggested creation of a financial redressal agency (FRA) to address consumer complaints against companies across the financial sector.

The other important observations of the Commission, which was appointed by the government last year to recast and update financial sector legislations, include setting up of a separate debt management office (DMO) and financial sector appellate tribunal (FSAT). It will have to submit its report by March 2013.

As regards the Reserve Bank, the Commission said the central bank should focus on monetary policy, ensure consumer protection law in the fields of banking and payments.

The super regulator for the financial sector which would subsume the functions SEBI, IRDA, PFRDA and FMC be called as Unified Financial Agency (UFA).

"These changes will alter the Indian financial landscape from eight financial regulatory agencies to seven," said the Approach Paper on which the Commission will seek comments of stake holders before finalising its report.

Under the existing architecture, the financial sector is regulated by eight agencies which are RBI, Sebi, IRDA, Pension Fund Regulatory and Development Authority (PFRDA) and Forward Markets Commission (FMC), Securities Appellate Tribunal (SAT), deposit insurance agency DICGC and Financial Sector Development Council (FSDC).

As per the proposal, there would be five new agencies besides Reserve Bank and FSDC.

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Reader's Comments (4)| Post a Comment

not a great idea

informed investor | 03-Oct-2012Reply | Forward

Well the panel's suggestion seems absurd to me. Since all the regulators have their own domain what good can be done by bringing them all together. In a govt setup most of the time is wasted in beuracratic ways of approvals which increases with this setup. Is the change only to bring a change or has any rationale to it which I am unable to gather. The central complaint redressal will only delay the process of being heard and why not bring RBI under it because RBI govn is not easy to play as others are. This is just a govt tactic to keep the independence of regulators under control. More layers means more beuracrat sitting on top and much more control of central govt over this body. I am worried as SEBI's independence may be threatened by this since its the biggest regulator after RBI and most of the reforms, penalties etc are seen under it only. And needless to say govt always wanted that as seen in KM Abraham's case.

MERGER MIGHT BACKFIRE

TANVEER MD MASOOD | 02-Oct-2012Reply | Forward

THE PROPOSED MERGER OF FINANCIAL REGULATORY BODIES LIKE SEBI, IRDA, FMC, PFRDA INTO ONE SINGLE FINANCIAL AGENCY IS INDEED A WELL-THOUGHT OUT MOVE TO INTEGRATE THE WORKING OF VARIOUS FINANCIAL REGULATORS . AT THE SAME TIME THE FINDINGS OF JUSTICE SHRI KRISHNA MIGHT FACE A LITTLE CYNICISM AND EYEBROWS FROM VARIOUS FINANCIAL BANDWAGONS GIVEN THE FACT THAT SEBI AND RBI IS ALREADY THERE TO LISTEN TO CONSUMER GRIEVANCES AND THEIR ISSUES . SECURITY APPELLATE TRIBUNAL IS ALREADY PRESENT WHICH TAKES CAREOFF FINANCIAL GRIEVANCES OF INVESTORS . MOREOVER, THE FACT THAT SEBI( SECURITY AND EXCHANGE BOARD OF INDIA) IS A FINANCIAL MARKET REGULATOR WHICH LAYS DOWN GUIDELINES AND PRINCIPLES CONCERNING MARKET TRANSACTION - THIS IS SO DIFFERENT FROM IRDA OR INSURANCE DEVELOPMENT REGULATORY AUTHORITY OF INDIA, RESPONSIBLE FOR CONTROLLING AND REGULATING INSURANCE TRANSACTIONS AND PRINCIPLES TO BE ADHERED FOR INSURANCE COMPANIES FOR CARRYING OUT INSURANCE BUSINESS.

Justice BN Srikrishna Panel Suggests Unmanageable Mega Monolith.

G. C. Mathur | 02-Oct-2012Reply | Forward

Justice Srikrishna Panel's suggestions for merging of financial sector regulators in the rising complications of financial transactions writings and creating a single super regulator above them is like building of a mega stone building that will neither move nor speak nor change directions. However, I think it may not be a bad idea to create a Financial Sector Consumer Redressal Agency above these regulators with the assistance of a Director General Investigations. Suggestions for a separate Debt Management Office and RBI for Banking and Payment complaint redressal are fine with consumers. However, the appellate powers against the rulings of the Financial Sector Redressal Agency, RBI and Debt Management must remain with the National Consumer Disputes Redressal Commission.