Srikrishna committee: ‘Common regulator for financial sector’
As per the suggestions made by Financial Sector Legislative Reforms Commission (FSLRC), headed by former Justice B. N. Srikrishna, key regulators such as the Securities and Exchange Board of India (SEBI), the Insurance Regulatory and Development Authority (IRDA), the Pension Fund Regulatory and Development Authority (PFRDA) and the Forward Markets Commission (FMC) should be merged into a Unified Financial Agency (UFA).
Why the commission was set up?
FSLRC was set up in March 2011, to recast the financial sector legislations in tune with the contemporary requirements of the sector.
Key recommendations of Financial Sector Legislative Reforms Commission:
- Establish a Financial Redressal Agency (FRA) to look into consumer complaints against companies across the financial sector.
- Set up independent Debt Management Office (DMO) and a Financial Sector Appellate Tribunal (FSAT) to hear appeals against regulators.
- Establish five new regulating agencies namely UFA, FSAT, FRA, DMO and Resolution Corporation.
- Need for separating the adjudication function from the mainstream activities of a regulator in order to achieve a greater separation of powers.
What is the present scenario?
Under the current structure, the financial sector is regulated by eight agencies: the RBI, SEBI, the IRDA, the PFRDA, the FMC, SAT, deposit insurance agency DICGC and the Financial Sector Development Council (FSDC). As per the recommendations of the panel, there would be 5 new agencies besides the RBI and the FSDC. The new ones would be UFA, FSAT, FRA, DMO and Resolution Corporation.