Government has introduced a new proposal for redefining the regulatory arrangement of big financial institutions. The proposal recommends establishing “a college of supervisors”. This college would include representatives of various regulatory agencies.
The discussion paper about the formation of the Financial Stability and Development Council (FSDC) has claimed that these big financial organizations have a major role to play in the financial services segment.
Major names like State Bank of India, ICICI Bank, HDFC Bank are monitored by Reserve Bank of India. But RBI just controls the banking divisions of these firms which have now entered into the insurance, mutual funds, pension management segments as well as numerous other segments.
The report states, “At present, each of these (institutions) have numerous subsidiaries operating in all the silos of Indian finance. Each regulator sees one or more subsidiaries operating in its silo. However, the overall picture is not fully known to any arm of government/regulatory agencies”.