Against the backdrop of the recent chit fund controversy in West Bengal, a single unified regulator will help in plugging regulatory oversights, said former Supreme Court judge B.N. Srikrishna.

These comments were made by Srikrishna, Chairman of the Financial Sector Legislative Reforms Commission, at a panel discussion. The commission has strongly pitched for a unified regulator in the financial sector.

The report focuses on unifying financial sector regulators such as Securities and Exchange Board of India, Insurance Regulatory Authority of India and Forward Market Commission among others. On the other hand, banking and payments will continue to be under the Reserve Bank of India.

While referring to the Ponzi scheme in West Bengal, Srikrishna said, “We have seen how regulatory gaps have enabled sharks to swim through. The obvious reason is, if you say that this regulator has this domain jurisdiction, then it refuses to look at anything else...In between, somebody takes advantage and runs away with public money.

“The ponzi scheme arises because regulator ‘A’ says this is not my baby. Regulator B says I am not concerned with this... So the ponzi runs through… That is exactly what is known as the regulatory gap,” said Srikrishna.

According to him, we need one unified regulator which will, irrespective of the jurisdiction, have to deal with it (the wrongdoings), be it insurance frauds, ponzi schemes or any other financial issue.

Consumer is the king even in the financial sector and we have forgotten that, Srikrishna added.

>deepa.nair@thehindu.co.in

>beena.parmar@thehindu.co.in

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