J

NAME : JAY KUMAR VASANT BHAI SOLANKI.

STUDENT ID : 18BBA098
SUBJECT: IFS
PRESENTATION ON REGULATORY FRAMEWORK
FACULTY GUIDE : AARZOOBEN VHORA
DEPARTMENT : INDUKAKA IPCOWALA INSTITUTE OF
MANAGEMENT
CHARUSAT UNIVERSITY
INTRODUCTION

• India has a financial system that is regulated by independent regulators in the sectors of
banking, insurance, capital markets, competition and various services sectors. In a
number of sectors Government plays the role of regulator.
• Ministry of Finance, Government of India looks after financial sector in India. Finance
Ministry every year presents annual budget on February 28 in the Parliament. The
annual budget proposes changes in taxes, changes in government policy in almost all
the sectors and budgetary and other allocations for all the Ministries of Government of
India.
• The annual budget is passed by the Parliament after debate and takes the shape of law.
FINANCIAL REGULATORY BODIES

• Financial sector in India has experienced a better environment to grow with the
presence of higher competition.
• The financial system in India is regulated by independent regulators in the field of
banking, insurance, mortgage and capital market. Government of India plays a
significant role in controlling the financial market in India.
• Ministry of Finance, Government of India controls the financial sector in India. Every
year the finance ministry presents the annual budget on 28th February.
• The Reserve Bank of India is an apex institution in controlling banking system in the
country. Its monetary policy acts as a major weapon in India's financial market.
FINANCIAL REGULATORY BODIES

• Securities and Exchange Board of India (SEBI) is one of the regulatory authorities for India's capital
market.
1) RESERVE BANK OF INDIA (RBI)
2) SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)
3) IRDA
4) FMC
5) PFRDA
 RESERVE BANK OF INDIA (RBI)

 Reserve Bank of India is the apex monetary Institution of India. It is also called as
the central bank of the country.
 The bank was established on April1, 1935 according to the Reserve Bank of India
act 1934. It acts as the apex monetary authority of the country.
 The Central Office of the Reserve Bank has been in Mumbai since inception. The
Central Office is where the Governor sits and is where policies are formulated.
 Though originally privately owned, since nationalization in 1949, the Reserve
Bank is fully owned by the Government of India.
 OBJECTIVES OF THE RESERVE BANK OF INDIA (RBI)

• The Preamble to the Reserve Bank of India Act, 1934 spells out the objectives of the Reserve Bank as:
“to regulate the issue of Bank notes and the keeping of reserves with a view to securing monetary
stability in India and generally to operate the currency and credit system of the country to its advantage.”
• Prior to the establishment of the Reserve Bank, the Indian financial system was totally inadequate on
account of the inherent weakness of the dual control of currency by the Central Government and of credit
by the Imperial Bank of India.
• A significant object of the Reserve -Bank of India has also been to assist the planned process of
development of the Indian economy. Besides the traditional central banking functions, with the launching
of the five-year plans in the country, the Reserve Bank of India has been moving ahead in performing a
host of developmental and promotional functions, which are normally beyond the purview of a
traditional Central Bank.
FUNCTIONS OF THE RESERVE BANK OF INDIA (RBI)

• As per the RBI Act 1934 it performs 3 types of functions as that of

any other central bank. They are,
1. Banking Functions
2. Supervisory Functions and
3. Promotional Functions.
 ROLE OF RESERVE BANK OF INDIA (RBI)


The preamble of the reserve bank of India is as follows:
To regulate the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in
India and generally to operate the currency and credit system of the country to its advantage.”
Central Board
•The Reserve Bank's affairs are governed by a central board of directors. The board is appointed by the
Government of India in keeping with the Reserve Bank of India Act.
•Appointed / nominated for a period of four years.
•Constitution
•Official Directors
•Full-time: Governor and not more than four Deputy Governors
•Non-Official Directors
•Others: four Directors - one each from four local boards
•Functions: General superintendence and direction of the Bank's affairs
ROLE OF RESERVE BANK OF INDIA (RBI)
• Local Boards
• Each for the four regions of the country in Mumbai, Calcutta, Chennai and New Delhi
• Membership
• Consist of five members each
• Appointed by the Central Government
• For a term of four years
• Functions
• To advise the Central Board on local matters and to represent territorial and economic interests of local
co-operative and indigenous banks, to perform such other functions as delegated by Central Board from
time to time.
SECURITIES AND EXCHANGE BOARD OF
INDIA (SEBI)
• Securities and Exchange Board of India (SEBI) established under the Securities and Exchange
aboard of India Act, 1992 is the regulatory authority for capital markets in India.
• India has 23 recognized stock exchanges that operate under government approved rules,
bylaws and regulations. These exchanges constitute an organized market for securities issued
by the central and state governments, public sector companies and public limited companies.
• The Stock Exchange, Mumbai and National Stock Exchange are the premier stock exchanges.
Under the process of de-mutualization, these stock exchanges have been converted into
companies now, in which brokers only hold minority share holding. In addition to the SEBI
Act, the Securities Contracts (Regulation) Act, 1956 and the Companies Act, 1956 regulates
the stock markets.
SECURITIES AND EXCHANGE BOARD OF
INDIA (SEBI)
•Objectives of SEBI
•As an important entity in the market it works with following objectives:-
•It tries to develop the securities market.
•Promotes Investors Interest.
•Makes rules and regulations for the securities market.

•Functions Of SEBI
•Regulates Capital Market
•Checks Trading of securities.
•Checks the malpractices in securities market.
•It enhances investor's knowledge on market by providing education.
•It regulates the stockbrokers and sub-brokers.
•To promote Research and Investigation.
 SECURITIES AND EXCHANGE BOARD OF
INDIA (SEBI)
• SEBI In India's Capital Market
• SEBI from time to time have adopted many rules and regulations for enhancing the Indian
capital market. The recent initiatives undertaken are as follows:
• Sale Control on Brokers: Under this rule every brokers and sub brokers have to get
registration with SEBI and any stock exchange in India.
• For Underwriters: For working as an underwriter an asset limit of 20 lakhs has been fixed.
• For Share Prices: According to this law all Indian companies are free to determine their
respective share prices and premiums on the share prices.
INSURANCE REGULATORY&DEVELOPMENT AUTHORITY(IRDA) 

• IRDA was setup in 2000 as an autonomous body to regulate and develop the business of insurance and
reinsurance in the country as per the insurance regulatory and development authority act,1999.
• IRDA is the controlling and regulatory apex body in the country for insurance sector and its chairman
and members are appointed by Government of India.
• IRDA’s HQ is located at Hyderabad.
• The Authority is a ten member team of
• I. a Chairman;
• II. five whole-time members;
• III. four part-time members,(all appointed by the Government of India)
OBJECTIVE OF IRDA

• The main objective of the Insurance Regulatory and Development Authority of

India is to enforce the provisions under the Insurance Act. The mission
statement of the IRDA is:
• 1. To protect the interest and fair treatment of the policyholder.
• 2. To regulate the insurance industry in fairness and ensure the financial
soundness of the industry.
• 3. To regularly frame regulations to ensure the industry operates without any
ambiguity.
ROLES OF IRDA
• To protect the policyholder’s interests.
• To help speed up the growth of the insurance industry in an orderly fashion, for the benefit of
the common man.
• To provide long-term funds to speed up the nation’s economy.
• To promote, set, enforce and monitor high standards of integrity, fair dealing, financial
soundness and competence of the insurance providers.
• To ensure genuine claims are settled faster and efficiently.
• To prevent malpractices and fraud, the IRDA has set up a grievance redress forum to ensure
the policyholder is protected.
FUNCTIONS OF IRDA
• Grant, renew, modify, suspend, cancel or withdraw registration certificates of the insurance company.
• Protecting the interests of the policyholder in matters concerning the grant of policies, settlement of claims,
nomination by policyholders, insurable interest, surrender value of the policy and other terms and conditions of the
policy.
• Specify code of conduct, qualifications and training for intermediary or insurance agents.
• Specify code of conduct for loss assessors and surveyors.
• Levying fees and charges for carrying out the provisions of the Act.
• Undertaking inspection, calling for information, and investigations including an audit of insurance companies,
intermediaries, and other organizations associated with the insurance business.
• Regulate and control insurance rates, terms and conditions, advantages that may be offered by the insurance
providers.
FORWARD MARKETS COMMISSION(FMC)

• FMC is a regulatory authority for commodity futures market in India. FMC is the chief regulator
of forward and futures markets in India. FMC comes under the Ministry of Consumer Affairs,
Food and Public Distribution because futures traded in India are traditionally in food
commodities.
• Headquartered in Mumbai.
• FMC is a legal body set up under Forward Contracts (Regulation) Act 1952. The Act provides
that the Commission should consist of minimum two and maximum four members appointed by
the Central Government. The chairman of the FMC is nominated by the central government.
FUNCTIONS OF FMC
• To advise the central government in respect of the recognition or the withdrawal of
recognition from any association.
• To advise the central government in respect of issues arising out of the administration of the
Forward Contracts (Regulation) Act 1952.
• To keep forward markets under observation and to take such action in relation to them, as it
may consider necessary, in exercise of the powers assigned to it under the Act.
• To make recommendations to improve the organisation and working of forward markets;
• To undertake the inspection of accounts and other documents of any recognised association,
registered association or any member of such association whenever it considers it necessary.
DIVISION OF FMC

• Division Of Markets, Trading And Development ( Market

Division)
• Research Training And Intermediatory Registration and IT.(IR
Division)
• Investigation And Legal Affairs Division.(Legal Affairs Division)
PENSION FUND REGULATORY AND
DEVELOPMENT AUTHORITY (PFRDA)

• Pension Fund Regulatory and Development Authority is a regulatory body

which was established in 2003 with an aim of promoting, regulating and
developing the pension sector in India.
• Initially, PFRDA was formulated for Government sector employees only but
gradually, its services extended to all citizens of India and NRIs including self-
employed individuals. 
FUNCTIONS OF PFRDA

• Focuses on promoting pension schemes in order to secure and serve the old
age financial needs of retired persons on a sustainable basis
• Regulates the pension schemes to which PFRDA Act is
applicable- NPS and Atal Pension Yojana
• Fosters NPS- Tier 1 & Tier 2 for the benefit of the subscribers
• Designates varied intermediate agencies such as Pension Fund Managers,
Central Record Keeping Agency etc.
FUNCTIONS OF PFRDA
• The preamble formulates public notices to spread awareness about importance
of pension schemes
• Initiates grievances portals and redressal mechanism for the pension
subscribers
• Trains intermediaries about educating, popularizing, resolving queries of
individuals for retirement related instruments & plans
• Works on settlement of disputes among the intermediaries and also between
intermediaries & subscribers