Published: June 27, 2014 23:11 IST | Updated: June 27, 2014 23:11 IST
Change RBI Governor, Swamy tells PM
Former Union Minister and BJP leader Subramanian Swamy has asked Prime Minister Narendra Modi to replace RBI Governor Raghuram Rajan for his “wrong policies”.
In a letter to the Prime Minister, Mr. Swamy has enclosed a copy of a letter from former Supreme Court judge Justice B.N. Srikrishna, which he says is an indictment of the RBI governor for his wrong policies.
He also pointed out that it sends a wrong message about the NDA government that persons like Dr. Rajan would continue to be Governor of the RBI on the grounds that he is qualified as if “there are no patriotic Indians who are at least or more qualified than him”.
“I had hoped that upon our Government taking office... [Rajan] would be replaced and in his place someone more highly qualified and patriotic such as Dr. R Vaidhyanathan, Professor of Finance, Indian Institute of Management, Bangalore, would be appointed in his place,” the letter says.
http://www.thehindu.com/news/national/change-rbi-governor-swamy-tells-pm/article6155996.ece?css=print
![A file picture of former Supreme Court Judge Srikrishna. Photo: Vivek Bendre.]( "A file picture of former Supreme Court Judge Srikrishna. Photo: Vivek Bendre.")
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http://www.india.com/business/sebi-chief-keen-to-implement-self-regulation-for-mutual-funds-84555/
http://www.thehindu.com/opinion/editorial/needed-more-deliberation/article6134194.ece
http://www.business-standard.com/article/economy-policy/rajan-dismisses-idea-of-unified-regulator-114061701141_1.html
Published: March 11, 2014 18:37 IST | Updated: March 11, 2014 18:40 IST
Former SC judge Srikrishna appointed as FPSB chairman
The HinduA file picture of former Supreme Court Judge Srikrishna. Photo: Vivek Bendre.
The Financial Planning Standards Board India (FPSB), the professional standards setting body for financial planners, today appointed B N Srikrishna, a retired Supreme Court judge, as its chairman.
The appointment of Srikrishna, who authored the much-talked about Financial Sector Legislative Reforms Commission (FSLRC), is effective this fiscal.
He takes over from Dhirendra Swarup, who was the chairman of the Pension Fund Regulatory and Development Authority (PFRDA).
The former Supreme Court judge was also the chairman of the Sixth Central Pay Commission apart from being the chief justice of the Kerala High Court.
On his appointment, Srikrishna said, “As a public-private enterprise and professional standards setting body for financial planning, FPSB India has been doing a commendable work.”
FPSB India is a public-private enterprise and a professional standards setting body that proactively guides development and promotion of standards for financial planning professionals to benefit and protect the public.
It was established by leading financial institutions including LIC, SBI, UTI AMC, ICICI, Axis Bank amongst others.
http://www.thehindu.com/business/Economy/former-sc-judge-srikrishna-appointed-as-fpsb-chairman/article5773941.ece
Sebi chief keen to implement self-regulation for mutual funds
Mumbai, Jun 26 : Market regulator Sebi today said it was keen to implement self-regulation in the Rs 10 trillion mutual fund industry at the earliest and said it will soon come out with new rules for distributors and advisors. ”There is a demand for self-regulatory organisations (SROs) in the MF sector and we are very keen on that and are also hopeful of implementing the same soon,” Securities & Exchange Board of India(Sebi) Chairman UK Sinha told reporters on the sidelines of a mutual fund summit here. Sinha also said the regulator is finalising norms for distributors and investor advisors and they will be issued shortly.
The Sebi chief said that although the idea of an SRO has been challenged in court, he is hopeful of its implementation. The Financial Planning Supervisory Foundation (FPSF), where retired Supreme Court Justice BN Srikrishna is a director, has taken Sebi to court over the SRO matter. It contends a possible conflict of interest if an industry group that has been protecting the interests of MFs appoints a company as an SRO to regulate its distributors and agents.
Srikrishna chaired the Financial Sector Legislative Reforms Commission, which recommended sweeping changes in financial sector regulations. Sinha also said pension funds should come into the mutual funds sector and tax benefits should be offered for investors in real estate investment trusts and infrastructure. The size of the pension market, estimated at over Rs 1.5 trillion in 2010, is expected to rise to over Rs 2 trillion in 2015 and over Rs 4 trillion by 2025. Sinha said that Sebi had asked the government to provide clarity on tax benefits for new products like REITs (real estate investment trusts) as also for infrastructure investment trusts and debt securities.
“Sebi will soon finalise norms for REITs, but is awaiting clarity on taxation issues,” he said, adding that the regulator wants such trusts to get tax pass-through status. Addressing the MF summit organised by the Confederation of Indian Industry, Sinha said there are “certain anomalies in withholding tax on debt securities” and he expressed hope that the government will soon provide clarity and tax pass-through status to REITs. ”We have recommended to the government for tax breaks for REITs investors and hope the government will consider the same,” he said.
Sinha also said that Sebi approved a long-term policy for mutual funds, which includes enhancing the reach and promoting financial inclusion, tax treatment and obligations of various stakeholders, among other things, to achieve sustainable growth of the industry and mobilisation of household savings.
Published: June 21, 2014 00:38 IST | Updated: June 21, 2014 00:38 IST
Needed, more deliberation
Many of the key recommendations of the high-level Financial Sector Legislative Reforms Commission (FSLRC) continue to attract criticism, more than a year after its report was released. Chaired by retired Supreme Court Judge B.N. Srikrishna, the FSLRC was given a wide mandate to prepare a blueprint for a new financial architecture. The report has evoked strong responses, with some calling it a potential game-changer and others faulting it for being out of touch with the Indian reality. The FSLRC has had to grapple with several dissenting views among its members. It is not surprising therefore that the report of the commission dealing with a radical overhaul of the financial architecture — an enormously time-consuming process — has remained on the back burner for a while. The renewed interest in the subject is probably due to the fact that the new NDA government would look at the subject afresh and implement some of the less controversial recommendations. Among the most contentious proposals of the FSLRC involve the setting up of two entities: one, a new “super-regulator”, the Unified Financial Regulatory Agency (UFRA); and two, a Financial Sector Appellate Tribunal to review regulatory decisions. The former would be solely responsible for the oversight of the securities market, insurance, pensions and commodities. In effect, it will take over the functions of the existing regulators, including SEBI and the IRDA. If this proposal is implemented, the financial sector will have just two regulators, the RBI and the proposed UFRA. In the new set-up, the RBI will have some of its existing functions, such as regulation of organised financial trading, taken away.
The RBI will have a diminished role, confined to being the monetary authority and regulator of banks. In another recommendation, the FSLRC wants a new monetary policy committee — which would be dominated by government nominees — and not the RBI Governor, to set policy interest rates. There are more instances of explicit bias towards the government as seen by the recommendation to appoint the Finance Minister as the head of the Financial Stability and Development Council. Over a year ago, the then Governor, D. Subbarao, sought to protect the RBI’s turf. It is now Raghuram Rajan’s turn to shift the spotlight to what he considers to be ill-conceived recommendations. For instance, the enhanced role being given to ill-equipped and inexperienced appellate tribunals will undermine the role of regulators and paralyse the system. Underlying Governor Rajan’s strong words is the belief that an overhaul of the financial architecture as suggested by the Srikrishna Commission will have to be preceded by more deliberations, a point of view that will be appreciated by Finance Minister Arun Jaitley.
http://www.business-standard.com/article/economy-policy/rajan-dismisses-idea-of-unified-regulator-114061701141_1.html
FSLRC suggestions on regulators scope 'schizophrenic': RajanPTI June 17, 2014 Reserve Bank of India Governor Raghuram Rajan on Tuesday trashed the much talked about Financial Sector Legislative Reforms Commission (FSLRC) and described one set of its recommendations as "somewhat schizophrenic". Saying that he wanted to debate parts of the FSLRC report, Rajan said there are two issues-the oversight of regulators and their size and scope. "The second area of tension is the appropriate size and scope of regulators. The FSLRC's recommendations seem somewhat schizophrenic here," he said. "On the one hand, it emphasises synergies in bringing together some regulators into one entity. But in the process it suggests breaking up other regulators, with attendant loss of synergies," Rajan said at the State Bank of India's 'Banking and Economic Conclave' in Mumbai. The Governor also said the FSLRC suggests laws that do not micromanage, giving regulators the freedom to fill in the details in consonance with the changing needs of the economy. "At the same time, the FSLRC wants to check and balance the activities of regulators through judicial oversight. Too much of checks and balances could completely vitiate the flexibility afforded by rewriting laws," he said. The FSLRC was set up in March 2011 to review and rewrite the legal institutional framework of financial sector laws. The Commission headed by retired Supreme Court judge B N Srikrishna suggested, among other things, setting up a super regulator by merging the oversight functions of the market, commodity, insurance and pension regulators, while leaving the banking business under the RBI. Rajan, however, said: "There is no discussion of the empirical magnitude of the synergies gained or synergies lost, which makes the recommendations seem faddish and impressionistic rather than based on deep analysis." The Governor said the FSLRC seems to be inconsistent in its emphasis on synergies and regulatory uniformity. "It proposes all regulation of trading should move under one roof, all regulation of consumer protection should move under another roof, but the regulation of credit should be balkanised banks should continue to be regulated by the RBI but the regulation of the quasi-bank NBFCs should move to the Unified Financial Agency, a regulatory behemoth that would combine supervision of trading as well as credit," he said. This balkanisation, Rajan said, would hamper regulatory uniformity, supervision of credit growth and the conduct of monetary policy. The previous United Progressive Alliance government had asked regulators to voluntarily implement the non-legislative recommendations of the FSLRC and the Finance Ministry had issued a 'guidance handbook' on the matter. | ||||
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