The Hindu Business Line : `Develop India as global hub for financial services'

The Finance Minister, Mr P. Chidambaram, with the Managing Director & CEO, National Stock Exchange, Mr Ravi Narain, and the SEBI Chairman, Mr G.N. Bajpai, at the National Stock Exchange in Mumbai on Friday. — Paul Noronha

Mumbai , Oct. 29

THE Union Finance Minster, Mr P. Chidambaram, said today that work on setting up a statutory regulator for the pension fund industry and integration of the commodities market with the securities market will be completed in the current financial year.

Speaking at the 10th anniversary celebrations of the National Stock Exchange in Mumbai, the Finance Minister said that in all likelihood the legislation for setting up of the Pension Fund Regulatory and Development Authority (PFRDA) should go through in the Winter session of Parliament. "We intend to have a separate pension fund regulator which should serve as a medium to attract overseas pension fund managers to look at India. Investors must have full choice of who manages these funds and in what manner," he added.

On the convergence of the commodities with the securities market he said that the issue is in final stages of discussion between the Ministry of Finance and the Department of Consumer Affairs. "We have one more round of discussion with Mr Sharad Pawar (Union Agriculture Minister) to get our views in place before going to Parliament," he added.

Advocating promoting India as a "world-class financial centre," Mr Chidambaram emphasised the need to have a securities market that is fair, open, transparent, competitive and efficient. "Indian companies must go global and do financial intermediation abroad. Some of the biggest finance companies overseas are cutting up their product chain and sending some pieces to India. Why can't we build, in India, a hub for all these services? Financial services can be produced here and sold all over the world," he said.

Citing the success story of outsourcing in the information technology and pharma sectors, he said that India should take up outsourcing of securities operations for other countries. "For instance, a country like Venezuela could have an exchange with its front-end operations in the country while outsourcing the back-office operations to India. Similarly, we could have a major role to play in the bullion and currency trade," he elaborated.

Taking a cue from the ministers "go global theory", Mr Ravi Narain, Managing Director, NSE, said: "We need to look at if our markets can become an Asian hub in the outsourcing sense. NSE could serve as a bridge between our investors and other markets. Today, we do two million trades a day but are already working towards exceeding 10 million trades a day. However, a moot point to note is that only two per cent of our financial savings is flowing into the market. What we need to do first is to increase this said percentage and the only way to do it is to step-up investor awareness. To this purpose we are looking at conducting 50-60 investor programmes every year."

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