Finance Minister Pranab Mukherjee today asserted that various regulatory bodies like the RBI, Sebi and Irda etc would enjoy autonomy given to them by the relevant laws and that there will be no interference whatsoever by the government in their functioning.
"If there is a conflict between two regulators in cases of hybrid products, a joint mechanism will be put in place through an Ordinance to decide which regulator has the jurisdiction. Except this, there will be no interference by the government," Mukherjee told newsmen here after a meeting with the Southern chief ministers and heads of public sector banks.
"The government has no intention to interfere with the autonomy of any regulator," he stressed.
Meanwhile in New Delhi, Finance Secretary Ashok Chwla said a Bill to replace the Ulips Ordinance will be placed in the forthcoming session of Parliament beginning July 26.
"Regulators have raised their points of view. The Finance Minister has taken note of those issues. The Ordinance in whatever form has to be placed before Parliament. It is matter of a few days when this (Bill) will be tabled and everybody would know what the future course of action on this particular piece of regulation is," Chawla said.
It can be recalled that following the turf war between Sebi and Irda over control of Ulips, the government late June issued an Ordinance, investing the Irda with the powers to regulate unit-linked insurance products.
However, fearing that the Ordinance will dilute the central bank's role as the financial sector coordinator, the RBI has reportedly requested the Finance Ministry to let the Ordinance lapse and not covert it into a law. The RBI heads the High Level Coordination Committee on Financial Markets.
"I have come to meet the Finance Minister in connection with the Ordinance that they have issued regarding settlement of dispute on regulatory jurisdiction. RBI has certain reservations and concerns, which we have expressed in the letter," he told reporters after the meeting in New Delhi on July 12.
The RBI contends that the new arrangement will dilute the role of the existing which is headed by the RBI Governor and acts as the nodal authority for coordination among regulators.
The members of the HLCC include chiefs of financial sector regulators, including Sebi and Irda, besides finance secretary and the chief economic advisor.
Replying to a question, Mukherjee said in Hyderabad the government will soon arrive at a decision on the Bill to regulate microfinance institutions. "The Bill is under examination of the government and we shall soon arrive at a decision," he said, when questioned about the long-pending legislation that primarily is intended to place a cap on the interest rates being charged by microfinance institutions.
