Steering India's Finance: Meet the Top Regulators in the Game

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.
Written by
Mohd Suhail
Published on
September 25, 2023

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 

Who is regulating the financial system of India?

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:

Reserve bank of india

Reserve Bank of India: 

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:

  • It approves bank branches and grants the license for starting banks.
  • It develops, implements, and reviews prudential requirements, similar to the Basel framework.
  • By establishing reserve requirement ratios, it maintains and controls the reserves of the banking industry.
  • It examines the banks' financial records and monitors the overall stress level in the banking industry.
  • It supervises the dissolution, fusion, or reconstruction of financial institutions.
  • It controls the infrastructure and processes for payments and settlements.
  • It produces, distributes, and circulates money all over the nation.

Security and Exchange Board of India: 

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:

  • It stops insider trading and unethical business practices.
  • It is permitted to control corporate acquisitions, carry out audits, and establish the standards and conduct that must be adhered to for the smooth operation of the financial markets.
  • This financial regulator's duties include keeping an eye on the actions of financial intermediaries like brokers and sub-brokers and preventing fraud and creating a safe environment for investors.

Insurance Regulatory and Development Authority of India: 

Another financial authority in India that oversees the money market is the Insurance Regulatory and Development Authority of India. 

  • It primarily protects India's insurance industry. People can safeguard their loved ones, property, and health with insurance coverage. The legitimacy of general insurance and life insurance plans would be at risk if several insurance companies established various policy guidelines and rates. IRDAI is helpful in this situation. 
  • IRDAI is a statutory organization that supports the insurance sector's healthy development and efficient operation in India.
  •  It promotes fairness in the insurance industry and aids in protecting the interests of policyholders. 

Ministry of Corporate Affairs(MCA)

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.

Pension Fund Regulatory and Development Authority (PFRDA)

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:

  • Conducting research and examinations into participants, including intermediaries.
  • Raising public awareness of retirement savings, pension plans, etc., and educating intermediaries.
  • The resolution of disagreements between pension fund subscribers and agents.
  • Registration and control of agents.
  • Defending the objectives of users of pension funds.
  • Establishing standards for pension fund investment.
  • Establish a code of conduct, practice guidelines, terminologies, and standards for the pension business.

Association of Mutual Funds:

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.

Join 20,000+ subscribers

Stories of wealth, Investing and Dreams. We will never spam you 🙌

Almost finished...

We need to confirm your email address.

To complete the subscription process, please click the link in the email we just sent you.
Oops! Something went wrong while submitting the form.

Read more 👇

8 min read

7 Hottest Fixed Deposits to invest in India 2023

Fixed deposit is a much safer investment option which can bring good returns after a certain tenure.
Read post
8 min read

Unlocking the Potential of Income Funds: Features, Risks, and Returns

Income Funds, a category of debt funds in India, have become a popular choice for investors seeking stable returns. These funds primarily invest in various debt instruments for longer durations.
Read post
8 min read

Interval Funds - Meaning, Features and Taxation

Interval Funds offer a unique investment opportunity within the world of mutual funds. These funds, operating as a blend of open-ended and closed-ended funds, have specific intervals during which investors can buy or sell units at the prevailing NAV.
Read post