A unified regulator will cover mutual funds, insurance, pension and the commodities markets.
The Financial Sector Legislative Reforms Commission (FSLRC), chaired by S N Srikishna in its approach paper has proposed setting up a Unified Financial Agency (UFA). Banking will not be under the purview of this unified proposed regulator.
“The unified financial regulatory agency, which would deal with all financial firms other than banking and payments, would yield benefits in terms of economies of scope and scale in the financial system; it would reduce the identification of the regulatory agency with one sector. The unification of regulation and supervision of financial firms such as mutual funds, insurance companies and a diverse array of firms which are not banks or payment providers, would yield consistent treatment in consumer protection and micro-prudential regulation across all of them,” said the approach paper.
The financial sector is regulated by eight sector specific regulators like RBI, SEBI,FMC, IRDA, PFRDA,SAT,DICGC, and FSDC.The proposed regulator will cover mutual funds, insurance, pension and commodities.
The committee has recommended setting up the following structures:
- An independent debt management office
- A unified financial regulatory agency, which enforces the consumer protection law and micro-prudential law in all finance other than banking and payments
- The Financial Stability and Development Council (FSDC)
- The Financial Redressal Agency (FRA), which addresses consumer complaints across the entire financial system
- The Financial Sector Appellate Tribunal (FSAT), which hears appeals against all financial regulatory agencies
- A resolution agency which implements the proposed law on resolution of financial reforms
- The Financial Stability and
Development Council (FSDC)
FSLRC was formed to review the legal and institutional structures of the financial sector to make them in tune with the contemporaryrequirements of the sector.
