FINANCIAL REGULATIONS

INTRODUCTION

PROF CA UJWAL DHOKANIA

(M.Com, CA, SET, Phd. Registered)
 What is financial regulation?

Financial regulation is a form of regulation or supervision,

which subjects financial institutions to certain requirements,
restrictions and guidelines, aiming to maintain the stability and
integrity of the financial system. This may be handled by either
a government or non-government organization.
Financial regulations are laws that govern banks, investment
firms, and insurance companies. They protect you from
financial risk and fraud. But they must be balanced with the
need to allow capitalism to operate efficiently.
 OBJECTIVES OF FR

Market confidence – to maintain confidence in the

financial system
Financial stability – contributing to the protection
and enhancement of stability of the financial system
Consumer protection – securing the appropriate
degree of protection for consumers.
FINANCIAL REGULATORS IN INDIA
 ( A) Statutory Bodies via parliamentary enactments:
 

Reserve Bank of India :  

RBI
 is the apex monetary institution of India. It is also called as
the central bank of the country. 
It was established on April 1, 1935 in accordance with the provisions
of The RBI Act, 1934.
The central office of the RBI was initially established in Calcutta but
was permanently moved to Mumbai in 1937.
 The preamble of the RBI is as follows:
  "To regulate the issue of bank notes and keeping of reserves with a
view to securing monetary stability in india and generally to operate
the currency and credit system of the country to its advantage.”
 

Securities and Exchange Board of India  :  

◦SEBI Act, 1992 : Securities and Exchange Board of India (SEBI) was first

established in the year 1988 as a non-statutory body for regulating the securities

market.

◦It became an autonomous body in 1992 and more powers were given through an

ordinance. Since then it regulates the market through its independent power

Insurance Regulatory and Development Authority : 

◦IRDA is a national agency of the Government of India and is  based in Hyderabad

(Andhra Pradesh).

◦ It was formed by an Act of Indian Parliament known as IRDA Act 1999, which

was amended in 2002 to incorporate some emerging requirements.

 (B) Part of the Ministries of the Government of India :
Forward Market Commission India (FMC) : 
 Forward Markets Commission (FMC) headquartered at Mumbai, is a regulatory authority
which is overseen by the Ministry of Consumer Affairs, Food and Public Distribution, Govt. of
India.
 It is a statutory body set up in 1953 under the Forward Contracts (Regulation) Act, 1952  This
Commission allows commodity trading in 22 exchanges in India, out of which three are
national level. 
    PFRDA under the Finance Ministry : 
  Pension Fund Regulatory and Development Aulthority  was established by Government of
India on 23rd August, 2003.  
 The Government has, through an executive order dated 10 th October 2003, mandated PFRDA
to act as a regulator for the pension sector.
 The mandate of PFRDA is development and regulation of pension sector in India.
 Role of Regulatory Bodies
Role of RBI
 Control money supply
 Monitor key indicators like GDP and Inflation
 Maintain people’s confidence in the banking and financial system by
providing tools such as ‘Ombudsman’
 Formulate monetary policies such as inflation control, bank credit and
interest rate control
 Role of SEBI
 Protect the interests of investors through proper education and guidance
 Regulate and control the business on stock exchanges and other security
markets
 Stop fraud in capital market
 Audit the performance of stock market
Role of IRDA
 To protect the interests of the policyholders
 To regulate, promote ensure orderly growth of the insurance industry and
for related matters.
 Role of FMC
 To Control Over Forward Market Transactions (Now Merged
with SEBI)
Role of PFRDA
 To set up pension reforms and
 To inculcate the habit of saving for retirement amongst the
citizens.
QUESTION IF ANY ?????

THANK YOU