A government-appointed panel on Friday suggested merging the oversight functions of regulators such as the Securities and Exchange Board of India, Insurance Regulatory Development Authority, Pension Fund Regulatory and the Development Authority and the Forward Markets Commission into a single agency, while leaving the banking regulation under the Reserve Bank of India (RBI).
The Unified Financial Agency (UFA), as suggested by the Financial Sector Legislative Reforms Commission (FSLRC), would rekindle the debate on setting up a super regulator for the financial sector.
The report, which was submitted to finance minister P Chidambaram, also suggested setting up of a debt management office (DMO) for raising resources for the government expenses. At present, the government raises funds by issuing bonds through RBI.
FSLRC headed by Justice (retired) BN Srikrishna was mandated to harmonise financial sector legislations, rules and regulations, and submitted its final report that sets the ground for rewriting more than 60 acts to make them contemporary.
The panel, it is learnt, has called for a statutory body called 'Resolution Corporation', which will systematically oversee all important financial institutions for generation of early warning signals to promptly deal with any weaknesses in the system.
The Financial Sector Development Council (FSDC), headed by the finance minister and peopled by heads of all financial sector regulators, should be given statutory powers, it has been suggested. Effectively, this means there would be three new agencies: UFA, DMO and the Resolution Corporation.