Should regulators have separate powers so that they have more accountability? Experts seem to think they should, as complete authority will clearly define rules on ownership, governance and enforcement.
Speaking at a national seminar on Indian Financial Code, organised by Institute of Company Secretaries of India, Ashok Chawla, Chairman, Competition Commission of India, said there should be functional independent regulators.
“There is a huge paradigm of powers, and regulators need to look at the whole architecture of society and accordingly function.”
Stating that the regulations were not cast in stone and should be reviewed from time-to-time, Chawla said regulations must benefit a large canvas of audience within the society.
M.S. Sahoo, Secretary, Institute of Company Secretaries, noted that the financial structure was complex and constantly changing.
“Regulators are quasi-judicial bodies. Currently, our Constitution does not have strict separation of powers. It is good in one way that Government is the total authority. However, in many cases regulators overlap and this leads to confusion on the authority and role. Ponzi and plantation schemes are a few examples where multiple regulators overlapped and hence no one acted on it leading to the schemes to thrive,” he said.
Experts also suggested that multiple agencies should have a single unified agency to act as a regulator.
Ajay Shah, Professor, National Institute of Public Finance and Policy, said, “At present, regulators were more like jagirdars. Regulators should ideally combine executive, legislative and judicial powers. They should, by and large, carry economic benefits. Currently, the system is about power, not benefits to the society. Such a draconian system should be done away with”.
Shah also underlined the need for systemic documentation. “There have to be rules on ownership and governance. This way you can hold an agency responsible for success and failure. Also, each agency should have performance reporting. Such best practices need to be adopted from international best practices,” he added.