Regulation means putting official restrictions and control over the institution. financial regulators have control over the financial institutions. Every regulator is instrumental in making sure that the interests of the inventors and all other parties are not compromised and that there is fairness in the financial system of India.
Financial Regulators in India are
- SEBI (Security and Exchange Board of India)
- RBI (Reserve Bank of India)
- IRDAI (Insurance Regulatory and Development Authority of India)
- PFRDA (Pension Fund Regulatory and Development Authority)
- MCA (Ministry of Corporate Affairs)
SEBI-The security and exchange board of India was set up in 1988 to regulate the functions of the securities market. Its main motive is to protect investors’ interests. SEBI Promotes solid improvement in the financial exchange however at first, SEBI couldn’t practice unlimited authority over the financial exchange exchanges. It is having a different legitimate presence.
The purpose of the foundation of SEBI was the development in the dealings of Stock Market, a lot of misbehaviors began in the stock market, for example, price rigging, so the government of INDIA decided to set up an agency or regulatory body known as SEBI. SEBI has the right to check which company is doing bad practices then make sure that the company will have to give the penalty. SEBI uses to regulate all security-related issues.
The main reason for SEBI is to keep an eye on misbehaviors and ensure the safety of investors
SEBI provides a marketplace in which Issuers can raise finance fairly.
For investors, SEBI provides protection and supply of accurate information.
For intermediaries, it provides a professional market.
The purpose of SEBI is to advance the improvement of the stock exchange. the following are the objectives of SEBI:
- To keep an eye on the activities of a stock exchange.
- To secure the interests of investors and guaranteeing wellbeing to their speculation.
- To prevent fraud and malpractices by having a balance between the self-regulation of business and its statuary regulations.
Functions of SEBI
- SEBI is an issuer of securities.
- Protector of investor’s interest.
- Traders and a financial mediator.
Reserve Bank of India is the central bank of India, it is established in April 1935 in Calcutta, the RBI later moved to Mumbai in 1937. after the nationalization in 1949, RBI is presently owned by the government of India. The central bank regulates the banking and financial system of the country by giving instructions and guidelines. RBI controls the money supply and also monitors key indicators like GDP and inflation.
RBI is a supreme body that governs and guides the Indian economy. The central bank has the power to keep all the commercial banks under itself for proper functioning. It accepts deposits from all the commercial banks and advances loans to them. But, the central bank cannot deal with the general public. It regulates the supply of money, besides being the principal source of money supply in the economy.
The central bank focuses on the growth and stability of the economy. It maintains people’s confidence in the financial and banking system. And it formulates monetary policies such as inflation control, bank credit, and interest rate control. The primary goals of RBI are to regulate the issue of banknotes to secure monetary stability in the country.
Function of RBI
- Printing and circulating currency- The most important function of RBI is the printing and circulating of currency notes and coins the all over Country, RBI is permitted to print currency up to 10,000 rupees notes.
- Maintaining inflation and deciding interest rates- Every time commercial banks fall short of funds. They approach the RBI to borrow money. the RBI lends money to these banks at a particular rate which is called the Repo rate also.it controls the money flow to control inflation.
- Managing the country’s foreign exchange reserves -RBI uses it to manage the foreign exchange reserves.it is managed by a process called reserve management.
The insurance regulatory and development authority of India is a statutory body for regulating and developing the insurance industry in India. It was set up in 1999 by the Indian parliament. Headquartered in Hyderabad, IRDA regulates and promotes the insurance business in India.
All the activities like monitoring the market and ensuring the financial stability of insurers are carried out from the head office in Hyderabad. IRDA intends to take forward the interest of the policyholder; it guarantees fast solutions to cases. Prevent frauds and malpractices; ensure fair conduct in the financial market when dealing with insurance.
Function of IRDAI
- It provides an applicant with the registration certificate, renewal, suspension, or cancellation of such registration;
- It grants and suspends the license for insurance companies.
- It protects the interest of the policyholder.
- Establishing norms for insurance intermediaries.
Pension fund regulatory and development authority act was passed on 19th September 2013, it regulates old-age pension funds like NPS-National Pension Scheme, ATAL PENSION YOJNA. The main purpose for making this is to secure senior citizen financial security, if there will be any dispute in the pension fund then PRFDA has the responsibility to settle down all the problems. PRFDA also provides education about the pension fund.
Function of PFRDA
- It Promotes old age income security by developing pension funds.
- PFRDA protects the interest of subscribers.
- It regulates the pension scheme to which the PRFDA act applies.
- PRFDA establishes pension funds.
The Ministry of corporate affairs is belonging to the Indian government ministry. It is concerned with the administration of the companies act 2013, MCA regulates the corporate sector. The law which regulates the company sector is basically under MCA like companies act administration, limited liability partnership administration. MCA also looks at professional bodies to in competition act, ICAI-Indian institute of chartered accountancy of India, ICSI-Institution of companies secretaries of INDIA.
It provides benefits by the ease in preparation, analysis, and communication of business information by the corporates. This site is your gateway to all services, guidance, and other corporate affairs related information.
Function of MCA
- It helps the unregistered companies to get the registration.
- It helps in getting an extension of time for holding the annual general meeting.
You may refer to this video if you want the explanation in Hindi