An Institutional Mechanism to look into Disputes of Regulators

The Indian government recently expressed willingness to promulgate the ordinance which was initiated on 18 June 2010 in the wake of jurisdictional dispute between SEBI and IRDA over ULIP. The government insisted on going ahead with the promulgation of the ordinance even after the dispute was resolved with the purpose of creating an institutional mechanism to resolve all future jurisdictional issues involving financial sector regulators. The ordinance, in its present form, provides ample scope for the executive arm of the government to take effective control of the financial sector. A new high-level body chaired by the Finance Minister and comprising  Finance Secretary and the four financial sector regulators would adjudicate on all jurisdictional disputes within a specified time frame and the decision of the body would be binding on all the regulators. The government’s initiative received objection from the regulators who mentioned that the ordinance would undermine the autonomy of the financial regulators including the RBI.