No intention to muzzle regulators, says FM

All the regulators in different sectors would enjoy their autonomy which has been given to them by the act passed by the Parliament, Mukherjee told reporters.

He asserted that various regulatory bodies like the RBI, Sebi and Irda etc would enjoy autonomy given to them by the relevant laws and that there will be no interference whatsoever by the government in their functioning.

“If there is a conflict between two regulators in cases of hybrid products, a joint mechanism will be put in place through an Ordinance to decide which regulator has the jurisdiction. Except this, there will be no interference by the government,” Mukherjee told newsmen here after a meeting with the Southern chief ministers and heads of public sector banks. “The government has no intention to interfere with the autonomy of any regulator,” he stressed.

“Except in this limited area, there is no other intention of the government or no other action is being taken by the government to interfere with the autonomous role of the regulators,” he said when a reporter drew his attention to the general feeling that the finance ministry is becoming a super regulator.

However, fearing that the Ordinance will dilute the central bank’s role as  the financial sector coordinator, the RBI has reportedly requested the finance ministry to let the Ordinance lapse and not covert it into a law. The RBI heads the High Level Coordination Committee on Financial Markets.

The RBI contends that the new arrangement will dilute the role of the existing which is headed by the RBI Governor and acts as the nodal authority for coordination among regulators.