Talking to The Financial Express, Dr Patil said stock exchanges do not have adequate teeth to take action against the companies not adhering to the listing norms and a separate body would be able to to look into various issues pertaining to the listing guidelines to be followed by companies.

At present, the stock exchanges do have some powers to take action against the companies but that is not enough to stop the malpractices. "Earlier the only fear for the companies was de-listing and now this is also not possible for the stock exchanges," he said.

In addition, the poor condition of most of the regional stock exchanges is also a factor that leads to the setting up of a separate body. Under the present listing norms, a company has to be mandatorily listed on the regional stock exchanges and the companies take advantage of the lack of monitoring by these stock exchanges.

"Many companies get themselves listed on the regional stock exchanges so that they can avoid the monitoring by larger exchanges. Most of the regional stock exchanges do not have the required staff and infrastructure to keep track on these errant companies," Dr Patil said. With the formation of a centralised listing norms, the concept of regional stock exchange should also be done away with, he added. In order to implement this idea, Dr Patil felt that there was a need for the close coordination between Ministry of Finance, Securities and Exchange Board of India (Sebi) and Department of Company Affairs (DCA).

There is also the problem of permitted listing. Under this a company may not have signed the listing agreement with a stock exchange, but its shares get traded on them.

"At the NSE, there are just around 700 odd listed companies, but trading is done in more companies under the permitted securities category," Patil stated.