FINANCIAL SYSTEM
FM III

Regulatory bodies- Role and functions
◦ RBI: Reserve Bank of India
◦ IRDA : Insurance Regulatory Development Authority
◦ PFRDA : Pension Fund Regulatory Development authority
◦ SEBI: Securities & Exchange Board of India

Introduction
◦ Established on April 1, 1935 under the Reserve bank
of India Act 1934.
◦ Initially, it was constituted as a private shareholder’s
bank with a fully paid up share capital of Rs 5 crores.
◦ It was nationalized on January 1, 1949.
o
It is the central bank of the country and the main
regulator of the banking system.
o
As the apex institution, it has been guiding,
monitoring, regulating, controlling and promoting the
banking as well as the financial system.
o
Being the apex institution of country’s monetary and
financial system it plays a leading role in designing
and conduct of the monetary and credit policy as its
special responsibility.

Role & Functions
o Note Issuing Authority
o Banker to the Government
o Bankers’ Bank
o Supervising and Regulating Authority
o Exchange Control (EC) Authority
o Promotional Functions
o Regulator of Monetary and Credit policy

Introduction
◦ It is an autonomous apex statutory body which
regulates and develops the insurance industry in India.
◦ It was constituted by a Parliament of India under the
Insurance Regulatory and Development Authority Act,
1999.
◦ It was incorporated as a statutory body in April, 2000.

Role & Functions
◦ To regulate, promote and ensure orderly growth of the
insurance business.
◦ To exercise all powers and functions of the controller
of insurance.
◦ To protect the interest of the policy holders in
settlement of claims and terms and conditions of
policies.
◦ To promote and regulate professional organizations
connected with insurance business.
◦ To call for information, undertake inspection and
conduct investigation including audit of the insurer,
intermediaries and other connected organizations and
persons.

Role & Functions
◦ To control and regulate the rates and terms &
conditions that may be offered by the insurers in
respect of general insurance matters.
◦ To prescribe the manner and form in which accounts
will be maintained and submitted by insurers and
intermediaries.
◦ To regulate investment of funds
◦ To regulate margins of solvency
◦ To adjudicate disputes between insurer &
intermediaries

Introduction
◦ was established by the Government of India on
23rd August 2003.
◦ to promote old age income security by establishing,
developing and regulating pension funds.
◦ to protect the interests of subscribers to schemes of
pension funds and
◦ for matters connected therewith or incidental thereto.

Role & Functions
◦ Regulating the National Pension Scheme.
◦ Educating the subscribers and the general public on
issues relating to pension, and training of
intermediaries
◦ Adjudicating disputes between intermediaries as well
as between intermediaries and subscribers
◦ Establishing mechanisms for grievance redressal of
the subscribers.

Introduction
o came into being in 1992 as an agency to protect the
interests of investors in securities.
o to promote a transparent and strong regulatory
structure for the efficient functioning of the capital
market.
o Intermediaries including merchant bankers, brokers,
portfolio managers, mutual funds, etc were brought
under SEBI regulations.
o SEBI deals with all aspects of capital market, viz; entry
to act as member/ dealer, merchant banker, MF and
Venture Capital markets.

Role & Function
o Regulating the business in stock exchanges and any
other securities markets.
o Registering and regulating the working of
stock
brokers, sub-brokers, share transfer agents, bankers
to an issue.
o 3.Registering and regulating the working of venture
capital (VC) funds.
o Promoting regulating self-regulatory organizations.
o Prohibiting fraudulent and unfair trade practices
relating to the securities market

Role & Function
◦ Promoting investors’ education and training of
intermediaries of the securities market.
◦ Prohibiting insider trading in securities.
◦ Regulating substantial acquisition of shares and
takeover of companies
◦ Calling for information from various intermediaries and
stock exchanges
◦ Per
◦ Levying fees or other charges for carrying out the
above purposes forming such functions or exercises