High-level FSDC will not be a super regulator: Pranab

KIRNAHAR: Asserting that financial sector regulators like RBI and SEBI would continue to enjoy powers, Finance Minister Pranab Mukherjee today said that the proposed high-level financial council FSDC will deal only with inter-regulatory issues and not act like a super-regulator.

"Let me say clearly that FSDC (Financial Stability and Development Council) will not assume the role of super regulator. The existing regulators will enjoy the powers as vested by (respective) Acts," Mukherjee told PTI in an interview here.

Noting that an air has been created that FSDC would take the role of a super regulator, he said, "This is not so."

Among the regulators, the Reserve Bank of Indian (RBI) has been raising concerns of autonomy in the wake of a proposal to establish FSDC and joint committee to sort out the turf war between SEBI and IRDA over regulation of Unit Linked Insurance Policy (ULIP) schemes.

The purpose of setting up the FSDC, Mukherjee explained, was to coordinate the work of various financial sector regulators including RBI, SEBI, IRDA and PFRDA.

To address the concerns of autonomy raised by RBI, the Finance Ministry had recently decided to set up an FSDC sub-committee which would be headed by the RBI Governor.

The Finance Ministry proposes to shortly announce the framework of FSDC which will be headed by the Finance Minister.

Mukherjee further said that such a council was necessary to resolve conflict among different regulators. "Certain things are necessary for smooth running of the system," he added.

The basic objective is to provide stability for a healthy development of the financial sector, he said, adding the FSDC will have representatives from the concerned quarters.