The government appointed committee is likely to come out with its recommendations on incentives for financial intermediaries to improve penetration of financial instruments in India.
The Government of India appointed committee – Financial Product Pricing Committee met in Delhi today to seek feedback from various industry representatives to suggest measures to increase the penetration of financial products in India. The committee will also suggest measures in devising the right incentive structure for various financial products.
Seven representatives comprising Financial Intermediaries Association of India (FIAI), Monika Halan, Editor, Mint Money, National Federation of Insurance Field Workers of India, Satish Menon, Executive Director, Gejojit BNP Paribas and Insurance brokers association of India were present in the meeting.
Former Union Finance Secretary Sumit Bose, former LIC Chairman SB Mathur, Financial Markets Joint Secretary Manoj Joshi, Partha Ray, Professor at Indian Institute of Management Calcutta, Manju Puri of Centre for Advanced Financial Research and Learning (CAFRAL) and S. Viswanathan, former Managing Director of SBI Capital Markets are the members of this committee.
“Financial products in India are push products. The committee has been set up to study the viability of financial distribution industry and suggest measures to improve penetration of various financial products. The penetration of mutual funds is low because of paltry commissions. We recommended to the committee that mutual fund distributors need to be adequately incentivized in order to channelize domestic savings in capital market,” said a member who attended this meeting today.
Sources said that the committee is likely to come out with its recommendations aimed at helping channelize domestic savings in capital markets, improve the penetration of insurance, and so on. This was the third and last meeting of this committee, said sources. The committee was formed by the Government in November 2014.
