The insurer is of view that the regulatory process in all these sectors need to be simplified
New Delhi: In a move to integrate the different supervisory functions into a single agency for the financial services sector, India's largest insurer Life Insurance Corporation of India (LIC) has batted for a unified regulator over all the existing financial regulators. However, setting up such regulator is not an easy task though. The insurer is of view that the regulatory process in all these sectors need to be simplified.
At present, different financial sectors like banking, capital markets, pension fund and insurance in India are regulated by the Reserve Bank of India (RBI), Securities and Exchange Board of India (Sebi), Pension Fund Regulatory Development Authority (PFRDA) and Insurance Regulatory and Development Authority of India (Irdai) respectively.
On the need of having a unified regulator for all the financial sectors, LIC chairman, MR Kumar, has said, "In future, we may need that as each financial sector regulator should have a better sense of market. We have a long road to go before we think of having such a regulator."
In April this year, the Centre had set up a unified regulator to regulate all financial services at Gujarat's International Finance Tec (GIFT) City in Gandhinagar. In line with this International Financial Services Centre (IFSC), there is also a clarion call for setting up a unified regulator to regulate and integrate the different supervisory functions into a single agency.
According to Kumar, India has been evolving over the years and regulations are important to ensure that market participants are acting properly. "Still, the regulatory process need to be simplified. We at LIC do dispute resolution at zonal level by a committee headed by a retired judge. In case the issue doesn’t get resolved there, then only we ask the policyholders to take the case to the insurance ombudsman,” he said.
However, many financial experts believe that the concept of a unified regulator is the necessary change that is crucial for making India the next big hub in the ever dynamic global financial landscape. It has been observed that many countries are now moving towards having unified regulatory authorities, indicating a changing global financial services landscape.