SME Times News Bureau | 23 May, 2013
Union Finance Minister P. Chidambaram on Wednesday advocated a complete revamp of the financial sector laws.
"There was a realization that the statutory and institutional foundation of the financial sector in India needs to be looked at afresh to assess its soundness in addressing the emerging requirements in the rapidly changing world," Chidambaram speaking at the Institute of Company Secretaries of India (ICSI) National Seminar of Indian Financial Code in New Delhi.
Pointing to the current "fragmented and disparate" financial sector statutory framework, the Finance Minister said that the Indian financial sector is governed by around sixty Acts and related rules & regulations. Many of these date back to around 80 years
It does not comprise a streamlined and precise framework adhering to a unified over arching objective or philosophy, he added.
The minister also said that there is also a multiplicity of Institutions and multiplicity of Regulators which have come up from time to time to meet newly perceived requirements and his multiplicity of laws and institution potentially create regulatory overlaps, gaps and ambiguity on account of lack of role clarity.
"This creates inefficiencies in addressing critical emerging issues in a increasingly dynamic, complex and interconnected financial world.," Chidambaram added.
Chidambaram said that passing legislation in India is not easy with coalitions and the legitimization of obstruction as a parliamentary tactic, but the government is committed to putting in place a new financial regulatory system that will serve the nation well for at least the next 50 years.
