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. These would be UFA, FSAT, FRA, DMO and Resolution Corporation.