Corporates told to be responsible

BANKERS CONFERENCE 2006

The need for regulation of a private commercial activity can be done away with if the social responsibilities expected of private players transform into viable business propositions, said C S Rao, chairman of the Insurance Regulatory and Development Authority, here today.

Addressing a panel discussion on 'Inclusive growth: Scope for regulation & supervision' at Bancon-2006, he cited the six-year experiences of Irda itself in this regard.

"The creation of a regulator for insurance sector was thought necessary at the time when it was opened up to the private sector considering certain obligations to be fulfilled like providing insurance cover to vulnerable sections of the society. Now this activity is also viewed as a profitable proposition by private insurance companies and they all have started offering a range of products to them," he said, adding that financial inclusion would thus become a win-win situation for both, rendering regulations redundant.

While arriving at the same conclusion from a different perspective, Sanjay Nayar, CEO of Citibank, however, said regulation and subsidies were required for initiatives in financial inclusion until such time as the market forces took over the activity.

Terming financial inclusion as a critical element in attaining inclusive growth, Nayar suggested that a system of rewarding the institutions that make headway in this direction should be evolved by regulators.