April 26, 2023

Financial Regulatory Bodies In India

Financial markets play an essential role in facilitating commerce, trade and boosting the economy. These also function as custodians of savings and investments of the people. Therefore, it is critical to monitor the operation of financial markets. Each industry in the Indian financial system has its own regulator. Read this article till the end to know in detail about the regulatory bodies within the Indian financial system.

Why Do We Need Financial Regulatory Bodies In India?

Financial market regulators’ key focus is to ensure that market participants act responsibly They also have to ensure that the financial system can continue functioning as an essential means of funding and credit for corporations, governments and the general public.
The main objectives of India’s financial regulators are
  • Maintaining financial stability
  • Ensuring consumer/ investor interests are protected
  • Maintaining market confidence among domestic and foreign investors
  • Reducing the occurrence of financial crime or fraud.
Financial regulation in India is built around regulating financial products or services. Therefore, we have the Reserve Bank of India (RBI) regulating fixed deposits, savings accounts and other banking products; the Securities Exchange Board of India (SEBI) which regulates equity market products, the Insurance Regulatory Development Authority of India (IRDA) which oversees insurance products and the Pension Fund Regulatory and Development Authority (PFRDA) that regulates pension products.
Let’s now take a look at some important regulatory bodies in the Indian financial markets.

Financial Regulatory Bodies in India

Reserve Bank of India (RBI)

The Reserve Bank of India (RBI) is India's central bank. It was established on April 1, 1935. Its primary function is to maintain price stability while nurturing the growth of the economy by making and implementing monetary policy. The RBI also issues, destroys and exchanges currency notes or coins as required. It also regulates credit supply, monitors bank operations and builds and maintains efficient and safe payment systems. . The RBI also regulates the foreign exchange market in India and is tasked with maintaining the value of the Indian currency. It functions as a banker to the government and the banks and its announcements impact private and public banks and the non-banking financial sector.

Securities and Exchange Board of India (SEBI)

The Securities and Exchange Board of India (SEBI) protects investors' interests in securities while promoting and regulating the securities market. It was established as a statutory body in 1992. SEBI’s primary goal is to ensure a proper and fair operation of the stock markets, to safeguard shareholder rights and to guarantee the safety of their investments. Through its regulations, SEBI aims to check frauds and nurture competition. SEBI promotes safe and equitable market practices in the following ways:
  • It prohibits insider trading and unfair business practices
  • It is authorised to regulate corporate takeovers, conduct audits and ensure code of conduct for the proper operation of financial markets is being followed
  • It provides a competitive marketplace where companies can raise capital when required
  • It tracks financial intermediaries' operations, such as sub-brokers, brokers, and so on, to prevent fraud and provide a safe environment for the investors.
  • It also works to increase investor awareness through education.

IRDAI

Another financial regulator in the Indian financial sector is the Insurance Regulatory and Development Authority of India (IRDAI). The IRDAI is the body in charge of insurance regulation in India. The Insurance Regulatory and Development Authority Act of 1999 established the regulatory body.
As of 2022, India has approximately 24 life insurance and 26 general insurance companies, 5 health insurance and 12 re-insurance companies. Its mission is to protect the best interests of insurance policyholders while also developing and regulating the insurance industry. It issues regular advisories to insurance companies and informs them of the changes in rules and regulations. IRDAI's primary functions are as follows:
  • To protect policyholders' interests and to treat them fairly by ensuring speedy settlement of legitimate claims
  • To prevent insurance fraud and other malpractices and establish effective grievance redressal mechanism
  • To facilitate the growth of the insurance industry
  • To generate long-term funds for investing in the economy
  • To ensure the financial security of the insurance sector.

PFRDA

The Pension Fund, Regulatory and Development Authority (PFRDA) is India's pension market regulator. It came into being on February 1, 2014. It Initially, PFRDA served only government employees. However, its services were eventually expanded to all Indian citizens, which included NRIs as well. The PFRDA is the body tasked with regulating the National Pension System (NPS). Its subscribers include public and private sector employees and those working in unorganised sectors.
The scope of the PFRDA consists of the following:
  • Creating investment guidelines for pension funds
  • Dispute resolution between pension fund subscribers and intermediaries
  • Raising awareness about retirement and pension plans
  • Examining intermediaries and other participants for possible wrongdoing

Ministry of Corporate Affairs (MCA)

The Ministry of Corporate Affairs regulates companies in the industrial and service sectors in India. It plays a crucial role in the gathering and evaluation of corporate business data. Furthermore, it enforces the Competition Act of 2002, to prevent market malpractice and protect participants' interests.

Conclusion

The financial markets facilitate liquidity, the mobilisation of funds and the formation of capital. As a result, it plays an important role in a country's economy, allowing participants -individuals, corporates and institutions- to trade, invest and grow financially. It is the government's responsibility to offer a healthy environment and safeguard the participants' interests, which it does with the assistance of the regulatory bodies listed above.

Disclaimer

The investment options and stocks mentioned here are not recommendations. Please go through your own due diligence and conduct thorough research before investing. Investment in the securities market is subject to market risks. Please read the Risk Disclosure documents carefully before investing. Past performance of instruments/securities does not indicate their future performance. Due to the price fluctuation risk and the market risk, there is no guarantee that your personal investment objectives will be achieved.

Never miss a trading opportunity with Margin Trading Facility

Enjoy 2X leverage on over 900+ stocks

Upstox Margin Trading Facility
Apple Logo
Downloadlogo
iOS App
Google Play Logo
Downloadlogo
Android App

RELATED ARTICLES

What is IMPS - Full Form, Features, Limit, Charges, & Meaning

Launched in 2010, IMPS, Immediate Payment System was developed as yet another nuanced alternative to transfer funds interbank via payment gateways such as RTGS and NEFT, electronically, in real time, everytime and everywhere using multiple access channels such as mobile banking, netbanking, ATM, SMS and IVR. Backed by the NCPI ( National Payments Corporation of India, and under the overall purview of the RBI, IMPS payment gateway can be availed by those banks and PPIs (prepaid payment instrument issuers) which have a valid licence from the RBI. Currently 652 members live on the IMPS payment gateway which includes banks & PPIs. This channel is versatile, simple and quick as in addition to fund transfers, it can also be used to pay insurance premiums, utility bills, ticket charges, fees, online purchases etc.Hope by now, you have understood the basic concept. So basically, the core objectives of introducing an alternative payment gateway was to: Incentivise customers to use the [ mobile banking](https://upstox.com/banking/what-is-mobile-banking-in-india-meaning-features-login-and-registration/) channel to transmit funds. Infact, the mobile banking channel further democratised the pace of digital adoption of banking services due to wider reach of smartphones. sides, this payment gateway is relatively simpler, as you only require the mobile number of the beneficiary and the bank generates a unique 7 digit MMID code. Given the ease, speed, 247 availability, instant notification and safety of the transaction, it is no wonder that this channel has gained significant momentum especially over the last two years ( 2020-2022) with the number of monthly IMPS transactions rising from 248 million to 420 million.

Canara Bank Timings: Working and Lunch Timings for Today and Saturday

Canara Bank timings are different for different services and different branches. However, most of the branches are open from Monday to Friday, 10:00 AM to 3:30 PM and Canara bank timings on Saturday are from 10:00 AM to 3:30 PM. Second and Forth Saturday of the month the bank is closed. Bank is also closed on all Sundays, national holidays, and gazetted holidays. Some of the branches have extended hours on certain days of the week. However, some branches open at 9:00 AM or close at 5:00 PM, it will vary depending on the location and the demand of the services in that area. Canara Bank's online banking services and Canara Bank's mobile banking services are also available 24/7, customers can access their account information, make transactions, pay bills and more from the comfort of their home or office. The bank's customer service is also available during the Canara bank working timings, customers can call the customer service hotline or visit the bank's website for assistance with any queries or issues they may have. It's worth noting that Canara Bank timings branches and services may be subject to change due to COVID-19 and the bank may have different timings for its branches based on the local regulations. Therefore, it's recommended to check the timings of the branch you're planning to visit before visiting it, to ensure that the branch is open and available during the time you plan to visit.

Bandhan Bank-Gruh Finance merger

In January 2019, Bandhan Bank, one of India's leading private sector banks, announced the acquisition of Gruh Finance, a subsidiary of the erstwhile Housing Development Finance Corporation Ltd. (HDFC). The merger brought together two companies with complementary strengths and expertise. In this article, we will look at the history of both the companies and the reasons behind the merger. The merger was seen as a strategic move for Bandhan Bank, which sought to diversify its loan portfolio and expand into new markets. By acquiring Gruh Finance, Bandhan Bank gained access to a well-established network of branches and customers in the affordable housing finance segment, a key growth area in India's banking sector. The merger was completed in October 2019, with Gruh Finance becoming a wholly-owned subsidiary of Bandhan Bank. As part of the deal, HDFC Ltd. received a 15% stake in Bandhan Bank's Gruh finance, making it one of the largest shareholders in the bank.

Canara Bank Balance Enquiry Toll Free Number and How to Check

In India, account holders can inquire about their balances by calling the following toll-free numbers: | 1800-425-0018 | 1800 208 3333 | | --- | --- | | 1800 103 0018 | 1800 3011 3333 | Canara Bank offers its customers a secure and convenient way of accessing their bank accounts. Customers can use online banking, mobile banking, ATMs, etc., to view their Canara Bank account balance. This blog post will outline the steps you need to take to check your Canara Bank balance. So let us get started!