Financial Regulatory Authorities in India

India follows a multi-regulator model rather than a single super-regulator. Different segments of the financial system are overseen by sector-specific authorities empowered by law: the Reserve Bank of India regulates banking, payments, and monetary stability; the Securities and Exchange Board of India oversees capital markets; the Insurance Regulatory and Development Authority of India regulates insurance; and the Pension Fund Regulatory and Development Authority supervises pensions.

The International Financial Services Centres Authority regulates India’s international financial centres.  To ensure coordination among regulators and preserve systemic stability, the government established the Financial Stability and Development Council, chaired by the Union Finance Minister, with heads of major regulators as members. The FSDC strengthens inter-regulatory coordination and oversees overall financial stability.

Reserve Bank of India

The Reserve Bank of India is the apex monetary and banking authority in the country. Established in 1935, it performs multiple functions, including:

• Formulation and implementation of monetary policy.
• Regulation and supervision of banks and non-banking financial companies.
• Management of foreign exchange under FEMA.
• Oversight of payment and settlement systems.
• Acting as banker to the government.

The RBI’s role is central to maintaining price stability, financial stability, and confidence in the banking system.

Securities and Exchange Board of India (SEBI)

The Securities and Exchange Board of India is India’s regulator for securities and capital markets. It was established on 12 April 1988 as a non-statutory body and was granted statutory powers through the SEBI Act, 1992, effective from 30 January 1992.

Headquartered in Mumbai, SEBI was strengthened in response to market scams and the expanding securities market, with the objective of ensuring transparency, fairness, and investor confidence.

Mandate and Key Functions

SEBI’s mandate is to protect investor interests, regulate the securities market, and promote its development. Its core functions include protecting investors from fraud and unfair practices, regulating stock exchanges and market intermediaries, enforcing disclosure and transparency norms, and fostering market development through modernization, new products, and improved processes. Through these roles, SEBI oversees the entire securities ecosystem, from corporate disclosures to trading and investor education.

Recent Initiatives

SEBI has introduced several measures to strengthen regulation and investor protection. The SCORES online grievance redressal system enables fast and transparent resolution of investor complaints, with strict timelines under SCORES 2.0. The Social Stock Exchange, conceptualized in the 2019–20 Budget and operationalized from 2022–23, allows social enterprises and non-profits to raise funds through regulated capital market platforms, combining financial discipline with social impact.
SEBI has also enhanced market surveillance using advanced technology, including AI and machine learning. Systems such as Sudarshan and tools like R(AI)DAR monitor trading activity, detect manipulation, and identify misleading financial promotions, improving real-time oversight in increasingly digital markets.

Insurance Regulatory and Development Authority of India(IrDAI)

The Insurance Regulatory and Development Authority of India is the apex regulator of India’s insurance sector, covering life, general, and health insurance.

It was established under the IRDA Act, 1999, based on the recommendations of the R.N. Malhotra Committee, and became operational in 2000 with headquarters in Hyderabad. IRDAI’s creation marked the liberalization of insurance, ending the state monopoly and allowing private and foreign insurers under statutory regulation.

Role and Functions

IRDAI’s mandate is to protect policyholders while promoting orderly growth of the insurance industry. It licenses and regulates insurers and intermediaries, sets entry and capital norms, and can suspend or cancel licenses for violations. It safeguards policyholders through rules on policy terms, claims settlement, grievance redressal, and standardized products, and has expanded access by measures such as removing the upper age limit for health insurance entry.
IRDAI supervises insurers’ financial health by prescribing solvency margins, investment norms, and actuarial standards, supported by inspections and reporting. It also regulates and encourages product development, moving towards simplified “use-and-file” procedures, promoting insurance awareness, micro-insurance, and new distribution channels to improve penetration.

Recent Initiatives

IRDAI introduced a Regulatory Sandbox in 2019 to allow controlled testing of innovative insurance products and technologies. In January 2025, its scope was expanded to include inter-regulatory experiments, supporting evolving InsurTech models while maintaining consumer safeguards.
A major reform is Bima Sugam, launched in phases in 2025, envisioned as a unified digital marketplace for buying, managing, and servicing all insurance policies on a single platform. With industry-wide participation, it aims to simplify processes, reduce costs, and boost penetration, aligned with the goal of “Insurance for All by 2047.”
IRDAI has also pursued reforms to expand coverage, including raising the FDI limit in insurance to 74% in 2021, launching mandatory standard insurance products, and rationalizing regulations to improve trust, competition, and accessibility.

Pension Fund Regulatory and Development Authority (PFRDA)

The Pension Fund Regulatory and Development Authority is the regulator of India’s pension sector. It was set up in 2003 as an interim regulator with the launch of the National Pension System (NPS) and was granted statutory status under the PFRDA Act, 2013 (effective 2014). Headquartered in New Delhi, PFRDA was created as part of pension reforms that shifted India from defined-benefit pensions to defined-contribution systems. Its mandate is to promote old-age income security by developing and regulating pension funds.

Scope of Regulation

PFRDA regulates the National Pension System (NPS) and administers the Atal Pension Yojana (APY). It oversees the entire pension infrastructure, including the NPS Trust, pension fund managers, annuity service providers, record-keeping agencies, and points-of-presence such as banks.

Key Functions

PFRDA regulates pension schemes by setting investment guidelines, fee structures, withdrawal norms, and by licensing and supervising pension fund managers and intermediaries. It protects subscribers through transparency requirements, caps on charges, prudential investment norms, grievance redressal systems, and an Ombudsman framework. It also plays a developmental role by expanding pension coverage, promoting financial literacy, and simplifying enrollment and access.

Atal Pension Yojana (APY)

Launched in 2015, APY is a government-backed pension scheme for unorganised sector workers aged 18–40, guaranteeing a fixed monthly pension of ₹1,000–₹5,000 after age 60. PFRDA administers APY in coordination with banks and monitors its implementation. By 2025, APY crossed 8 crore subscribers, reflecting its role in financial inclusion and social security.

Expansion and Digital Initiatives

NPS was extended to all citizens in 2009, enabling private-sector and self-employed individuals to save for retirement. PFRDA introduced e-NPS in 2016, allowing fully digital account opening and management using Aadhaar/PAN, online payments, and mobile access. Integration with DigiLocker, UPI-based contributions, and online exit processing has improved convenience and participation.

Recent Reforms

Key reforms include making 60% of NPS withdrawals tax-free (from 2019), raising the government’s contribution for its employees to 14%, increasing the equity exposure limit to 75% for private subscribers, and offering lifecycle funds to reduce risk with age. PFRDA is also working on introducing minimum assured return options for conservative investors.

International Financial Services Centres Authority (IFSCA)

The International Financial Services Centres Authority was established under the IFSCA Act, 2019 and became operational in April 2020. It serves as the unified regulator for financial services in India’s International Financial Services Centres, primarily GIFT City (Gujarat International Finance Tec-City), India’s first IFSC. Headquartered in Gandhinagar, Gujarat, IFSCA was created to replace the earlier multi-regulator framework (RBI, SEBI, IRDAI) in the IFSC with a single-window regulatory authority.

Role as a Unified Regulator

IFSCA regulates all financial products, services, and institutions operating in the IFSC, covering banking, capital markets, insurance, asset management, and fintech. It oversees IFSC Banking Units of Indian and foreign banks, foreign-currency trading on IFSC exchanges, insurance and reinsurance operations, and intermediaries, issuing prudential and market regulations aligned with domestic standards but tailored to offshore and global operations.

Regulation of Key Segments

IFSCA supervises banking and capital market activities, including foreign-currency trading of securities, derivatives, and commodities on IFSC exchanges. It regulates insurance and reinsurance entities operating in foreign currency, performing functions similar to IRDAI but under a dedicated IFSC framework. It also promotes fintech innovation through a regulatory sandbox and innovation hub, encouraging experimentation in digital finance, blockchain, and cross-border products.

Developmental Mandate

Beyond regulation, IFSCA has a strong developmental role to position GIFT City as a global financial hub. It aims to create a business-friendly, competitive regulatory environment, coordinates with the government on tax and policy incentives, signs MoUs with foreign regulators, and engages with industry to expand IFSC offerings. The unified regulatory structure provides faster approvals and greater flexibility compared to onshore regulation.

Key Initiatives and Developments

A major milestone was the launch of the India International Bullion Exchange (IIBX) in July 2022, enabling transparent, exchange-based trading and import of gold and precious metals. IFSCA has also issued frameworks to promote aircraft and ship leasing, allowing Indian carriers to lease assets from IFSC entities in foreign currency. It permits alternative investment funds, mutual funds, and structured products in the IFSC, attracting offshore capital and global participants.