Traders must closely monitor the functioning of the money market because the financial market is a crucial factor in economic expansion.
Many governing bodies oversee India's financial sector. Keeping financial markets fair, equal, and functional is the goal of India's financial regulators. Market regulators also set ethical requirements to ensure the financial system's stability.
The financial industries in India are banking, insurance, capital markets, commodities markets, and pension funds. The independent agencies that operate as regulators and supervisors are known as the regulators. For the Indian financial system's stability and integrity, each regulatory organization has its own rules.
The primary goals of the Indian financial regulatory agencies are to promote financial stability, protect consumers, preserve market trust, and lessen the likelihood of financial crime or fraud.
The crucial question that arises here is
The Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), the Insurance Regulatory and Development Authority of India (IRDAI), the Small Industries Development Bank of India (SIDBI), the Ministry of Corporate Affairs, and others are some of India's financial regulators.
Let us discuss the regulatory bodies one by one:
The supreme monetary authority in India is the Reserve Bank of India (RBI). RBI came into existence in 1934. The RBI oversees many responsibilities under the Banking Regulation Act of 1949. The RBI performs the following duties:
Under the SEBI legislation of 1992, a statutory agency known as the Securities and Exchange Board of India (SEBI) came into existence.
SEBI put an effort to stop capital market fraud and undermine public confidence.
Its main goal is to safeguard investors' interests by preventing fraud and guaranteeing efficient and equitable operation of the markets.
SEBI performs the following functions:
Another financial authority in India that oversees the money market is the Insurance Regulatory and Development Authority of India.
A department of the Indian government is called the Ministry of Corporate Affairs (MCA). It oversees the corporate sector and is mainly responsible for carrying out the Companies Act of 1956, as amended in 2013, and other laws.
MCA's goals are to safeguard the interests of all parties involved, uphold an atmosphere of fair competition, and aid in the expansion and development of businesses. The MCA gives the Registrar of Companies the power to register startups.
It was introduced in 2013 by the Pension Fund Regulatory and Development Authority legislation. It is the only entity in India that regulates the pension sector.
PFRDA initially exclusively provided coverage for workers in the public sector, but eventually, all Indian citizens, including NRIs, were given access to its services.
Its goals are to protect the interest of pension scheme participants and to ensure economic security for the elderly through the regulation and growth of pension funds. The following are the main functions of PFRDA:
In 1995, the Association of Mutual Funds in India (AMFI) came into existence.
By enforcing noble standards, AMFI ensures that the mutual fund sector runs smoothly and defends the interests of both fund houses and investors. All registered AMC must follow the AMFI's code of ethics.
Integrity, diligence, disclosures, professional selling, and investment practice make up this code of ethics. By enforcing moral standards, AMFI ensures that the mutual fund sector runs smoothly and defends the interests of both fund houses and investors.
Members of AMFI include most management firms, brokers, fund houses, intermediaries, etc.
For the benefit of investors and potential investors, AMFI regularly updates the Net Asset Value of its funds on its website. Additionally, it has made finding mutual fund distributors easier.
The financial market provides liquidity, cash mobilization, and capital formation. As a result, it plays a crucial role in every nation's economy, and Individuals get a chance to engage in commerce and develop their financial situation.
So, the government must ensure a safe environment and safeguard the players' interests. In India, financial regulators protect investors' rights and prevent market failures.
To ensure the integrity and efficient operation of the Indian financial system, many regulatory agencies have established various frameworks and structures along with their own rules of conduct.
The RBI regulates the banking sector, SEBI regulates the stock market, IRDA regulates insurance, and PFRDA regulates pension funds.
The MCA oversees the corporate sector under various laws, and the AMFI establishes moral standards for the mutual fund industry.