Page 10 - Mega Digi Page: General Awareness - Jan 2016
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www.bankersguru.org
(General Awareness)
Financial Sector legislative reforms commission (FSLRC) under B N Shrikrishna
recommended a sector-neutral Financial Redressal Agency (FRA) that will address the
grievances against all the financial services.
In this system the consumer would have a single complaint management agency.
The system would be backed by a proposed Indian Financial code to replace the bulk of the
existing financial laws.
The Draft Indian Financial Code
The draft Code is a non-sectoral, principles-based law bringing together laws governing different
sectors of the financial system.
It includes the nine core areas –
Consumer’s Protection
The draft Code establishes certain basic rights for all financial consumers and creates a single
unified Financial Redressal Agency
a detailed mechanism for cooperation between regulators and the Competition Commission.
Micro-Prudential Regulation
The draft Code specifies five powers for micro-prudential regulation:
Regulation of entry
Regulation of risk-taking
Regulation of loss absorption
Regulation of governance and management
Monitoring/supervision
Resolution
A unified resolution corporation, dealing with various financial firms, should be created
Capital controls
The FSLRC sees the Ministry of Finance creating the ‘rules’ for inbound capital flows and the
RBI creating the ‘regulations’ for outbound capital flows.
All capital controls would be implemented by the RBI.
Systemic risk
The FSLRC shall establish the Financial Stability and Development Council as a statutory
agency taking a leadership role in minimizing systemic risk.
Development and Redistribution
Developing market infrastructure and process
Monetary policy
An executive Monetary Policy Committee (MPC) would be established to decide on how to
exercise the RBI’s powers.
Public Debt Management
The FSLRC proposes a single agency to manage government debt
Contracts, trading and market abuse:
The draft Code establishes the legal foundations for contracts, property and securities markets.
Date of Release -14-Jan-16 SUBJECT: GA www.bankersguru.org
(General Awareness)
Financial Sector legislative reforms commission (FSLRC) under B N Shrikrishna
recommended a sector-neutral Financial Redressal Agency (FRA) that will address the
grievances against all the financial services.
In this system the consumer would have a single complaint management agency.
The system would be backed by a proposed Indian Financial code to replace the bulk of the
existing financial laws.
The Draft Indian Financial Code
The draft Code is a non-sectoral, principles-based law bringing together laws governing different
sectors of the financial system.
It includes the nine core areas –
Consumer’s Protection
The draft Code establishes certain basic rights for all financial consumers and creates a single
unified Financial Redressal Agency
a detailed mechanism for cooperation between regulators and the Competition Commission.
Micro-Prudential Regulation
The draft Code specifies five powers for micro-prudential regulation:
Regulation of entry
Regulation of risk-taking
Regulation of loss absorption
Regulation of governance and management
Monitoring/supervision
Resolution
A unified resolution corporation, dealing with various financial firms, should be created
Capital controls
The FSLRC sees the Ministry of Finance creating the ‘rules’ for inbound capital flows and the
RBI creating the ‘regulations’ for outbound capital flows.
All capital controls would be implemented by the RBI.
Systemic risk
The FSLRC shall establish the Financial Stability and Development Council as a statutory
agency taking a leadership role in minimizing systemic risk.
Development and Redistribution
Developing market infrastructure and process
Monetary policy
An executive Monetary Policy Committee (MPC) would be established to decide on how to
exercise the RBI’s powers.
Public Debt Management
The FSLRC proposes a single agency to manage government debt
Contracts, trading and market abuse:
The draft Code establishes the legal foundations for contracts, property and securities markets.
Date of Release -14-Jan-16 SUBJECT: GA www.bankersguru.org
