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| Govt to assess regulators' actions |
| Press Trust Of India / New Delhi Nov 16, 2009, 00:40 IST |
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The government is considering to put in place a mechanism for assessing the impact of actions of three regulators — Sebi for capital markets, PFRDA in pensions and Irda in insurance — as part of efforts to deepen the financial market.
Towards its plans to develop the markets and put in place a sophisticated financial system, Ministry of Finance (MoF) has decided to bring on board third-party consultants to carry out a study on design and implementation of ‘Regulatory Impact Assessment Module’ for regulators, a senior official said.
The study, for which expressions of interest have been sought from individual consultants and consultancy firms within the country and abroad, would also look into how the international experience could be brought to the country’s regulatory mechanism, particularly in the light of the recent financial crisis.
Some EoIs have been received by the Ministry, which would soon finalise the consultants to take forward the process, the official added.
The proposed study would involve identification of policy options, holding consultations with the stakeholders concerned, designing the Regulatory Impact Assessment module, and developing a programme for capacity building in the three regulators, as per the terms of reference made available to the potential consultants.
Besides, it would be the consultant’s job to develop the framework under which the impact assessment would be carried out for the regulator concerned.
This would involve an analysis prior to introducing new regulations and a validation or assessment of existing regulations. The study would also dwell upon how a balance could be reached between regulatory and development objectives of these regulators.
Besides the consultants, who are being engaged for a period of one year, would also suggest about developing a training programme, as per the needs of each regulator, and conduct pilot projects at each of the three agencies.
Indian capital markets have witnessed a radical transformation over the past decade and their risk management systems have proved to be robust.
However, the country needs to have an even more sophisticated financial system, the Ministry has said in its terms of reference for the contract.
In this context, the Ministry had requested the World Bank for a technical assistance project to support in capital market development, debt management and pension reforms.
The proposed Regulator Impact Assessment would be part of this technical assistance loan project of the World Bank.
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