Bigger reforms coming: Jaitley says will take up large number of FSLRC suggestions

Mumbai - The government will soon implement a large number of legislative and administrative recommendations of the Financial Sector Legislative Reforms Commission (FSLRC), which had suggested a major overhauling of financial sector regulations.

“As the change in process of reform continues … I have not the least doubt that a large number of these (FSLRC) recommendations will actually see implementation in the days to come,” Finance Minister Arun Jaitely said at a seminar organised by the ICSI.

The FSLRC, chaired by Justice B N Srikrishna, has suggested a non-sectoral, principle-based approach to revamp the existing framework. Among various suggestions, the FSLRC has suggested creation of a unified financial sector regulator comprising Sebi, Irda, FMC and part of the RBI.

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Jaitely said four different groups are studying the report and the implementation of the suggestions would require legislative as well as administrative changes.

FSLRC, which submitted its report to the government in March last year, has also given a draft legislation for putting in place an Indian Financial Code (IFC).

Various stakeholders, including the RBI, are opposed to certain proposals under the IFC.

Jaitley said: “Some legislative changes will also be required. I think with a combination of these administrative and legislative changes, the professional regulatory mechanism will come to stay.”

According to a report in The Hindu, the finance minister stressed on the need to institutionalise the present mechanism, where there is more trust in the market and state-led regulation hasless importance.

“We need the best practices in India… the best global practices. The Commission’s report is an extremely important step in developing that framework,” Jaitley has been quoted as saying in the report.

“We trusted the government than the market … and distribution of poverty got importance than the creation of wealth… the State cannot not be the player and the decision maker or referee,” the report quoted the minister as saying.

With inputs from PTI