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Regulatory Authorities in India and Their Impact on Business Environment
Presented By:Abhishek
Dishant HansMayank Jain
Agenda of Presentation
• Introduction• Different Regulatory Bodies• TRAI –A Review• SEBI – A Review • RBI – A Review• Need for Autonomy• Autonomy and Accountability• Future Scope
Regulatory Authority
Definition: a governmental agency that regulates businesses in the public interest
Necessity: Complexity of Markets Supervision Rapid Implementation of Policy Political Interference
Functions: quasi-legislative, quasi-judicial and quasi-executive
Regulatory Authorities In India
Reserve Bank of India
Securities and Exchange Board of India
Insurance Regulatory Development Authority
Competition Commission of India
Telecom Regulatory Authority of India
National highway Authority of India
All India Council for Technical Education
Medical Council of India
And many more...
TRAI – A Review
SEBI - A Review
Stock Exchanges- History & Problems
• Trade in stock market expanded after World War II• Stock Exchange trebled from 7 to 21. Various problems that
arose were:• Excessive Fluctuations-Wide and Wild Fluctuations in the
Stock Market
Stock Exchanges- History & Problems…
• Defect in the system of settlement in force• Defect in the credit facility such as budla, blank transfer• Put through business• Street Markets and Share Bazaars• Independent firms and Outside Brokers• Connection with the Stock Exchange• Manipulations
--Stock Exchange Members-Bear and Bull Tactics, Fake Transactions--Company Promoters and Directors-False Promotion, Unequal
Voting Rights
Effect on Business Environment
• Effect on credit System
• Widespread Tax Evasion
• Stock Market Crises and its effect on Banking
Problems before SEBI’s Creation
SEBI-Objectives
• In 1988, SEBI was established by the Government of India through • Became fully autonomous with the passing of the (SEBI Act) on
30th January 1992 with the prime objective of
– Protecting the interests of investors in securities,– Promoting the development of, and – Regulating, the securities market and for matters connected
therewith or incidental thereto.’
Focus being the greater investor protection, SEBI has become a vigilant watchdog
Stock Market Reformed
RBI – A Review
•Monetary Authority
•Regulator and supervisor of the financial system: •Manager of Foreign Exchange •Issuer of currency •Banker to banks •Banker to Government
Need For Autonomy
•Self Sustainability - Independence
•Need for review of existing laws regarding appointment and removal of members of regulatory bodies
•Better legal mechanism with checks and balances for the governance
•Freedom from political interference
Autonomy………Accountability…?
•Only administrative ministry…
•Implications of the policies of these authorities
•Too much belief in competency and intent of individuals
Future Scope…
•Clear definition of functional areas of different bodies (recent case of IRDA vs. SEBI)
• We have four major financial market regulators(RBI,SEBI, IRDA, PFRDA)…
• Is there a need for a super regulator? (Role of FSDC- Financial Stability and Development Council Fears of Govt. intruding on RBI’s and SEBI turf)
Thank You…
Questions?