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New financial services regulator
Why is it in the news ?
- The Union Cabinet has approved establishment of a unified authority for regulating all financial services in International Financial Services Centres (IFSCs) in India.
- It is established through International Financial Srvices Centres Authority Bill, 2019.
More in the news
- An IFSC is aimed at encouraging Indian companies that are conducting business in foreign financial centres such as London and Singapore, to bring that business to India by providing them with a global-standard regulatory and business environment.
- It would provide Indian corporates easier access to global financial markets.
- IFSC would also compliment and promote further development of financial markets in India.
Why a unified regulator?
- Currently, the banking, capital markets and insurance sectors in IFSC are regulated by multiple regulators, i.e. RBI, SEBI and IRDAI.
- The dynamic nature of business in the IFSCs necessitates a high degree of inter-regulatory coordination.
- It also requires regular clarifications and frequent amendments in the existing regulations governing financial activities in IFSCs..
- The development of financial services and products in IFSCs would require focussed and dedicated regulatory interventions.
- Hence, a need is felt for having a unified financial regulator for IFSCs in India to provide world class regulatory environment to financial market participants.
Source
PIB