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The Finance Minister, Mr Pranab Mukherjee, on Friday ruled out any Government intervention in the functioning of the financial sector regulators, stating that they are doing a “good job” in their respective domains.
“There is no need for intervention,” Mr Mukherjee told the Lok Sabha during question hour, adding that regulators need to continue having functional autonomy so that they can discharge their functions as “vested in law.”
At the same time, the Finance Minister pointed out that the respective laws governing the Reserve Bank of India, the Securities and Exchange Board of India and the Insurance Regulatory and Development Authority, had a specific provision (Section 3) enabling the Government to issue directions on matters of policy to these three financial sector regulators.
He also highlighted that the three financial sector regulators — the RBI, SEBI and the IRDA — submit their annual reports to Parliament, which in turn had the authority to check any “gross misdirection” by them.
As for the Pension Fund Regulatory and Development Authority, Mr Mukherjee said this Authority was created through an executive order, and that the Government was “contemplating” introducing a Bill to provide statutory status.
At present, all financial sector regulators have been mandated to look after regulation, development of the market segment under their regulatory domain and protection of the participants and consumers of the financial services.
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