Finance Ministry has been proposing many banking and financial sectors reforms these days. They are primarily targeted towards protecting banking and financial sector customers and investors. Of late, lots of fraudulent transactions and crimes have been committed against banking and financial sector customers and regulators have taken notice of the same.The recent Citibank fraud came as a wake up call and the government decided to review the regulatory issues regarding wealth management and private banking services offered by the banks. A sub-committee of Financial Stability and Development Council (FSDC) has been constituted in this regard which recently met in New Delhi.
FSDC discussed the issues of wealth management services by banks. Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI) may be made jointly responsible for implementing these regulations and keeping a watch for any violations. Indian government has also sought inputs from other regulatory bodies to frame a comprehensive rule-book for wealth management practices.
While the RBI and SEBI would play a dominant role, other regulators like commodity regulator FMC, insurance watchdog IRDA and pension fund regulator PFRDA would be roped in whenever necessary and needed.
The wealth management regulations of India are presently under process of being given a final touch. Financial Stability and Development Council (FSDC) is in the process of formulating final rules in this regard. FSDC is a high-level regulatory body set up in December 2010 and is chaired by Finance Minister Pranab Mukherjee. FSDC has been in favour of formulating wealth management regulations and the same have now been reiterated by its sub committee as well.
This is a good step in right direction and Finance Minister Pranab Mukherjee and RBI must be congratulated for all the good work they are doing in this regard.
