Finance Minister P Chidambaram in his first public address on Financial Sector legislative Reforms Commission at the National Seminar organised by the Institute of Company Secretaries of India (ICSI) spoke briefly about the set of rules regulations, acts that have been passed in the last 80 years. He said that these legislations were being enacted in piece meal and has left lapses and gaps between regulator ~ legal systems and conflict in policies.
Further he said that the current legislative framework addresses only temporary pressure and does not address critical key issues. He further said that there is multiplicity of laws, institutions and regulators that create ambiguity. He highlighted the challenges viz legislative change, capacity building, handling complexity of transition from present to the proposed Code etc. He further said that careful analysis of existing legislations in bringing legislative reforms for the financial sector is required.
The minister further said that the financial code advocates a non-sectoral and principle based approach.
He referred to the nine basic components for financial sector reforms referred by the Commission viz consumer protection, micro-prudential regulation, resolution, capital controls, systemic risk, development and re-distribution, monetary policy, public debt management and foundations of contracts and property.
Dr KP Krishnan, principal secretary, government of Karnataka in his address on the overview of Indian Financial Code briefed about the series of financial sector reforms since 1992.
He said that there is an internally consistent and complete approach to financial sector legislative reforms since mid 2000 and said that laws needed to be changed contemporariously and as a whole.
He further said that FSlRC will meet the financial sector requirement of 2050. He also briefed about nine components of the code and said this code would remove the vague objectives and vague powers and establish accountability mechanism. He further said that quasi judicial functions should be in a separate hierarchy.