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Govt tries to address RBI concerns on Ordinance
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NEW DELHI, JUL 28 (AGENCIES):
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Article published on 7/29/2010 12:03:51 AM IST
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Following opposition from RBI, the government today introduced a Bill in Parliament that proposes to elevate the central bank governor to the level of vice-chairperson of the joint mechanism to settle regulatory disputes over hybrid financial products.
The Bill, which will replace the contentious Securities and Insurance Laws (Amendment and Validation) Ordinance, 2010, which had proposed a joint mechanism headed by the finance minister, stated Business Standard. The RBI governor had raised concerns over the government’s proposal, arguing that it would affect regulatory independence. He had suggested that the Ordinance be allowed to lapse and the high-level coordination committee on financial markets continues to be the forum for regulatory coordination.
The government, at the behest of the Prime Minister, then suggested that the RBI governor be made the vice-chairperson, while the heads of the Insurance Regulatory and Development Authority, Securities and Exchange Board of India and Pension Fund Regulatory and Development Authority be appointed as members.
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