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Which are the Financial Regulatory Authorities in India?

March 10, 2020 By Mayank Mishra

 

Despite the 90’s globalization and the recent surge in the volume of digital payments, a vast segment of the Indian financial market is still unorganized. However, the share of the unorganized market has declined in the last couple of years. The credit goes to the visionary and decisive Government of India and to the financial regulatory authorities in India

Article Content

  • Financial Regulatory Authorities in India
    • Reserve Bank of India
    • Securities and Exchange Board of India
    • Insurance Regulatory and Development Authority of India
    • Pension Fund Regulatory and Development Authority
  • Summarizing

 



financial regulatory authorities in India

This article briefs the financial regulatory authorities in India, who are consistently taking new steps to organize and improvise the Indian financial sector.

An eco-system can remain healthy only if its organisms behave as per some set guidelines, instead of their own presumptions and predictions. These guidelines also develop a sense of accountability among the organisms and clearly distinguish the DO’s from the DONTs’. This in return, develops a healthy and transparent atmosphere for everyone. However, having some guidelines is one thing and abiding by them is another. Thus, a regulatory authority is needed to strictly ensure that every organism in the eco-system follows the guidelines.

Financial Regulatory Authorities in India

In the Indian financial market eco-system, there are 4 regulatory authorities which keep a strict tab on the activities of all its organisms.⇯
 

  1. Reserve Bank of India
  2. The Reserve Bank of India (RBI) is the apex of the Indian monetary system which controls the issue and supply of Indian Rupee. It plays a major role in the financial strategies of the Indian Government. The RBI regulates all the commercial banks and the non-banking finance companies of India. 
     
    Reserve Bank of India started operating in Calcutta on 01 April 1935, in accordance with the Reserve Bank of India Act, 1934. Later, it was moved to Mumbai in 1947. After India got independence in 1947, RBI was nationalized on 01 January 1949.
    ⇯

  3. Securities and Exchange Board of India
  4. Taking into account many complaints about frauds within the security market, in 1988 Govt. of India formed Securities and Exchange Board of India (SEBI). At that time SEBI did not have any powers. With SEBI Act 1992, Govt. of India made SEBI an autonomous body and provided statutory powers to it. Its head office is situated in Mumbai with 20 regional offices nationwide. Currently, SEBI regulates the security and the commodity market of India.

    Also Read  SEBI | Objective, Role and Functions

    Main objectives of SEBI are

    1. Maintain transparency in Indian security and commodity market
    2. Create and enforce bye-laws
    3. Listen to investor’s grievances and take action

     
    SEBI has also created a grievance support system for the investors called SCORES.
     
    With the help of its 20 SEBI departments, it regulates the Indian security and commodity market.⇯

    Forward Market Commission which used to regulate the commodity futures market in India was merged with SEBI on 28 September 2015. This merger led to strong regulation of Indian commodity market by SEBI.

  5. Insurance Regulatory and Development Authority of India
  6. Insurance Regulatory and Development Authority of India (IRDAI) regulates the insurance and re-insurance industries of India. It was established after Govt. of India passed the Insurance Regulatory and Development Authority Act, 1999. Its headquarter is in Hyderabad, Telangana.
     
    IRDAI is a 10 member body. It consists of one chairman, 5 full-time and 4 part-time members appointed by the Government of India.
    ⇯

  7. Pension Fund Regulatory and Development Authority
  8. The Pension Fund Regulatory and Development Authority (PFRDA) was established on 23 August 2003 by Govt. of India. It is a statutory body which regulates the pension in India. It is administered by the Department of Financial Services, Ministry of Finance.

    PFRDA body consists of one chairperson and not more than six members, of which at least three should be whole-time members to be appointed by Govt. of India.



    To check if the stock market or commodity market is open today see Stock Market Holiday for year 2021

    Summarizing


    In recent years several changes have been made by the Indian Government to bring transparency and increase the share of organized financial market in India. To assist the Indian Government in its initiatives, there are four regulators of Indian financial market viz

    1. RBI
    2. SEBI
    3. IRDAI
    4. PFRDA

    These regulators assist the Indian Government in their initiatives as well as, are the statutory body who have executive, legislative and judicial powers.

     ⇯

Filed Under: General

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