Recommendations for Further Improving Capital Market in India

The FSLRC (Financial Sector Legislative Reforms Commission), set up (headed by Justice B. N. Srikrishna) to examine the regulatory structure and the laws governing the financial sector, submitted its report by early 2013. In a broad sense, the commission has recommended for changeover from an ‘area-based’ division of regulators to a ‘task-based’ division. Major highlights of the recommendations are as follows:

    • Developing a ‘horizontal structure’ whereby, the basic regulatory/monitoring functions to be done by a UIA (Unified Financial Agency)—in place of each agency (like SEBI, IRDA, etc.) looking after one financial type and area. It will eliminate regulatory overlap
    • Setting up a FRA (Financial Redressal Agency) to handle consumer complaints, regardless of area. It means, regulator not to oversee the consumer complaints
    • FSAT (Financial Sector Appellate Tribunal) to be set up to hear the appeals of entire financial sector
    • Advice to set up three other agencies which will oversee banking, besides the RBI