Dr Duvvuri Subbarao, the previous governor of the Reserve Bank of India (RBI), has backed the demand for the central bank chief being given a veto power over interest rate decisions that are proposed to be handed over to a monetary policy committee (MPC).
Finance Secretary Rajiv Mehrishi confirmed that the suggestion to take away RBI governor's veto power on interest rate decisions did not come from the FSLRC reports but from 'public comments' on it.
The government "does not understand the fuss" over its recent proposal to constitute a seven-member monetary policy committee (MPC) and it will not take a hasty decision on whether to take away the Reserve Bank of India's veto power on the panel's interest rate decisions, sources have told CNBC-TV18.
The government has recently proposed to amend the Reserve Bank of India (RBI) Act to take away money market regulatory powers from the central bank and bring it under the purview of market regulator Sebi.
"The Financial Sector Legislative Reforms Commission (FSLRC) report recommends adoption of consumer protection framework that will empower and require regulators to ensure consumer protection for the financial activities regulated by them," RBI Executive Director N S Vishwanathan said.
This is Darius Khambata's first interview ever. He's agreed to talk because he wants to share his views on a few important issues in the news.
Adopting a key non-legislative recommendation of FSLRC panel for overhaul of financial sector regulatory framework, Sebi is launching public consultation for framing rules to allow re-classification of promoters at listed firms looking to become public shareholders.
The Commission, headed by former Justice B N Srikrishna, presented its report to the government on March 22, 2013. It had suggested merging of financial sector regulators such as Sebi and Irda into a Unified Financial Agency (UFA) and the role of RBI be restricted to regulating banks and managing monetary policy.
FSLRC chairmanSrikrishna said that hiring manpower for a unified regulator will be the biggest challenge.
In a bid to deal with collective investment and Ponzi schemes P Chidambaram said efforts are being made to frame a new law to bridge regulatory gaps in the financial sector.
YH Malegam, CA, S B Billimoria & Co, disagrees with Financial Sector Legislative Reforms Commission (FSLRC) recommendation that finance ministry should get the power to impose capital control instead of the Reserve Bank of India.
YH Malegam, CA, S B Billimoria & Co, dissenting member, FSLRC & long term board member of the RBI, says that the capital control should be maaged completely either by the government or the RBI. He also stressed that capital inflows cannot be looked at isolation and divorced from monetary policy.
Suggesting a level playing field for financial sector entities, a government appointed panel has made a strong pitch for converting SBI, LIC and few other firms into ordinary companies under the Companies Act.
The Financial Sector Legislative Reforms Commission (FSLRC) which was set up to rewrite and update all the archaic Indian financial sector laws, has recommended vast changes to the Reserve Bank of India's role.
The Financial Sector Legislative Reform Commission (FSLRC's) report has been put in public domain Latha Venkatesh, banking editor at CNBC-TV18, says dissent has been voiced against the clipping of RBI‘s powers, and that is going to be the point where the FSLRC could find maximum attack and discussion.
FSLRC chairman BN Srikrishna says, in an interview to CNBC-TV18, that he has recommended the setting up of a central bank monetary policy committee and two regulators among a slew of other reforms.
The legislation is the US' response to the global financial crisis of 2008. The Act was signed into law in July 2010 by President Barack Obama. Some of the major aspects of the Act include regulation of mortgages, loans and credit cards, overseeing Wall Street and systemic risks that occur within, and regulate, risky derivatives.
M Damodaran, Former Chairman of SEBI believes there is no final solution to what could be the best structure for a regulatory authority.Damodaran points out that every regulatory organization has over the years developed its own identity and has its own philosophy to regulate that part of the financial world.
The FSLRC recommends merging SEBI, IRDA and PFRDA into one financial regulatory authority, but according to Jalan, mixing different kinds of financial segments into one regulatory system may not be of much help.
The Indian financial sector may change unrecognizably. A financial sector legislative reforms commission set up by the last budget has put out its first approach paper and there is enough in those 35 pages to give a jolt.
Banks should not own mutual funds or insurance companies as subsidiaries. Instead, an RBI panel has recommended that financial conglomerates be structured so that a holding company is created with 3 distinct arms - the bank, the insurance company, and the mutual fund.
Amid rising scams and global economic worries, the high-profile panel on re-writing the country's financial sector rules will meet on June 6 to discuss ways to strengthen regulatory oversight.
Financial Sector Legislative Reforms Commission (FSLRC) was notified by the Government on March 24, 2011 pursuant to an announcement made by the Finance Minister in the 2010-11 Budget.
Financial Sector Legislative Reforms Commission chairman Justice BN Srikrishna told CNBC-TV18’s economic policy editor Siddharth Zarabi that he will seriously consider the formation of a financial sector super-regulator.
The finance ministry has said that the FSLRC panel meet will be held for the first time on April 5 and it will be headed by Justice BN Srikrishna. FSLRC will review at least 60 finance sector laws during the meet.