Economy Notes: Regulatory Bodies in India

Regulatory (Apex) Bodies in Financial sector in India

RBI (Reserve Bank of India)

• RBI was established in April 1935 under Reserve Bank of India, 1934.
• On the recommendation of Hilton-Young Commission.
• Central Bank of India which was nationalized in 1949.
• Central office initial was established in Calcutta and later moved to Mumbai in 1937.
• Official Directors- Governors and not more than four deputy governors.
  Currently following persons are on following posts-
  Governor- Shaktikanta Das
• RBI performs his function under the guidance of the Board of financial supervision.
  Board for Financial Supervision (BFS)-
  Constituted in November 1994.The Board is constituted by co-opting four Directors from the Central Board and is chaired by the Governor.
• Important Acts Administered by RBI-
  (i) Reserve Bank of India Act, 1934
  (ii) Public Debt Act, 1944/Government Securities Act, 2006
  (iii) Government Securities Regulations, 2007
  (iv) Banking Regulation Act, 1949
  (v) Foreign Exchange Management Act, 1999
  (vi) Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002
  Other Relevant Acts-
  (i) Negotiable Instruments Act, 1881
  (ii) Companies Act, 1956/ Companies Act, 2013
  (iii) Deposit Insurance and Credit Guarantee Corporation Act, 1961
  (iv) Regional Rural Banks Act, 1976
  (v) National Bank for Agriculture and Rural Development Act, 1981
  (vi) National Housing Bank Act, 1987
  (vii) Competition Act, 2002
  (viii) Indian Coinage Act, 2011
• RBI has 20 Regional offices and 11 Sub Offices
• Following are the fully owned subsidiary of RBI-
  (i) Deposit Insurance and Credit Guarantee Corporation of India (DICGC)
  (ii) Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL)
  (iii) National Housing Bank (NHB)
• First governor of RBI- Sir Osborne Smith
  First governor of RBI after nationalization- C. D. Deshmukh
  First women Deputy Governor of RBI -K.J.Udeshi.
• RBI Emblem: Tiger and Palm tree

SEBI (Securities and Exchange Board of India)

• Established in April 1992 under SEBI Act, 1992.
• Regulator for the securities market in India.
• Headquarters- Mumbai
• Current Chairman- Ajay Tyagi
• The Forwards Market Commission, the commodities market regulator, was merged with the Securities and Exchange Board of India in December 2015.

IRDAI (Insurance Regulatory and Development Authority of India)

• Apex Body in the insurance sector in India.
• Based on Insurance Regulatory and Development Authority Act, 1999.
• Established on the recommendation of Malhotra Committee report of 1994.
• Headquarter- Hyderabad, Telangana
• The Body consists of 10 members-
  (a) Chairman (b) Five full-time members (c) Four part-time members.
• Current Chairman- Subhash Chandra Khuntia

NABARD (National Bank for Agriculture and Rural Development)

• Apex development financial institution in India.
• Headquarter- Mumbai
• Established in July 1982 under NABARD Act 1981.
• On the recommendation of B. Sivaraman Committee.
• Replaced the RBI’s Agriculture Credit Department and Rural Planning and Credit cell.
• It is a specialised bank for Agriculture and rural development in India.
• Rural Innovation Fund and Rural Infrastructure Development Fund have been set under NABARD.
• Important Functions-
  (i) Recommends about licensing for RRBs and Cooperative banks to RBI.
  (ii) Refinances the financial institutions which finance the rural sector.
• Current Chairman- Dr Harsh Kumar Bhanwala

SIDBI (Small Industries Development Bank of India)

• Established in April 1990 under SIDBI Act, 1989.
• Provide refinance facilities and short-term lending to industries and MSME’s.
• Headquarter- Lucknow
• Associates of SIDBI-
  (i) Credit Guarantee Fund Trust for Micro and Small Enterprises- provides guarantees to banks for collateral-free loans extended to SME.
  (ii) SIDBI Venture Capital Ltd
  (iii) SME Rating Agency of India Ltd. (SMERA)- Provides composite ratings to SME.
  (iv) ISARC - India SME Asset Reconstruction Company in 2009, as specialized entities for NPA resolution for SME.
• MUDRA Bank is a subsidiary of SIDBI.

EXIM (Export-Import Bank of India)

• Premier export finance institution in India
• Established in 1982 under EXIM Act 1981.
• Headquarters- Mumbai
• It coordinates with the working of institutions engaged in financing export and import of goods and services.

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