March 23, 2013 2:34:13 am
The two predecessors of the Financial Sector Legislative Reform Commission report,the Percy Mistry report and that of Raghuram Rajan had their share of drama around their presentation. So its only fair that there would be some around this one too. After finance minister P Chidambaram received the report on Friday,it was announced the report will not be made public immediately.
This is surprising as the panel has already issued a detailed approach paper that has almost all elements of their report. The FSLRC,set up in 2011,has to clear up the overlapping turf of all regulators; the mission is to create a financial sector that attracts investors,makes it easier for companies to raise funds at cheap rates which means it must rank better than most markets of the world.
Laws governing the sector are decades old and have been subject to numerous amendments. The Sebi act,for instance,does not give the regulator powers to arrest anyone but tasks it with penalising all market related crimes stiffly.
FSLRC plans to eliminate 25 of the current 61 laws that currently govern the financial sector and amend many others. Additionally,it seeks to have a unified regulatory agency that would subsume watchdogs for insurance,capital markets,pension and commodities while letting the RBI continue its supervisory role over the banking industry.
The commission is led by former Supreme Court judge BN Srikrishna and has a fine mix of members such as former PFRDA chairman Dhirendra Swarup and banker PJ Nayak.
Whats more,the panels report is apparently backed by a full scale research team. Those in the know say that a group of lawyers also worked on the report,the second part of which deals with drafting the new law.
This should hopefully help fast track government response to it. Finance minister P Chidambaram has already promised to discuss the report with Prime Minister Manmohan Singh within the next few days.
Surabhi is a Special Correspondent based in New Delhi.
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