A high-profile panel will begin on Tuesday deliberations for rewriting the entire financial sector rules of the country and evolving a better regulatory oversight system to check frauds and irregularities.
The Government notified late last month the constitution of the Financial Sector Legislative Reforms Commission (FSLRC), which will hold its first meeting on April 5.
The panel will suggest ways for bringing India on a par with top global financial centres such as New York, London and Hong Kong and put in place new checks and balances to be able to quickly counter the rapidly changing nature of frauds and financial irregularities, said a person close to the matter.
Besides, he added, the group would also look at feasibility of having a super regulator for the existing financial sector watchdogs such as SEBI, RBI and IRDA.
The 11-member group, headed by former Supreme Court Judge Mr Justice B. Srikrishna and comprising eminent bankers, economists and former regulators, has been tasked with the job of reviewing and updating the entire gamut of financial rules.
Panel members
The members of the commission include pension sector regulator PFRDA's former Chairman, Mr D. Swarup, former Chairman of Axis Bank, Mr P. J. Nayak, and Prime Minister's Economic Advisory Committee (PMEAC) member, Mr M. Govinda Rao.
The need to rewrite financial sector regulations has been felt in the wake of a growing number of cases showing greater manipulation of existing norms. Besides, many rules have become outdated.
Some of the rules that are too old include the RBI Act, framed in 1934, the Insurance Act of 1938, the Public Debt Act of 1944 and the Securities Contract Regulation Act of 1956.
These are the key regulations governing the banking, insurance, debt and stock markets, respectively.
There have been a large number of amendments to these regulations since their coming into force, adding to the risks of making them more ambiguous and complex.
Besides, the Government is of the view that a large number of rules, and their amendments, lead to inconsistency and create regulatory gaps and overlaps in the oversight mechanism.