Amid a nationwide outcry over Ponzi schemes causing huge losses to common people, finance minister P Chidambaram on Wednesday said there are regulatory gaps in the financial sector and efforts are being made to frame a new law to address the gaps.
“The current arrangements have a number of gap areas, where no regulators are unambiguously in-charge, such as issue of regulatory oversight over diverse Ponzi schemes that we have discovered recently. These are cleverly designed to be out of the purview of regulatory agencies,” Chidambaram said at a seminar on the Indian Financial Code (IFC) organised by the Institute of Company Secretaries of India.
Multiplicity of regulators have led to several gaps and ambiguity, besides regulatory overlap due to lack of clarity, he said. “This creates inefficiencies in addressing critical emerging issues in an increasing dynamic, complex and interconnected financial world.”
The current financial architecture has evolved over the years with a sequence of piecemeal measures and legislations responding to immediate pressures from time to time, he said.