Page 20 - India Insurance Report 2023- BIMTECH

8 India Insurance Report - Series II

Commission (FSLRC) to comprehensively review and redraw the legislation governing India’s
financial system. According to the FSLRC, the current regulatory structure is fragmented and fraught
with regulatory gaps, overlaps, inconsistencies and arbitrage. To address this, FSLRC suggested a draft
Indian Financial Code (IFC) to replace the bulk of the existing financial laws. The draft code is a non-
sectoral, principle-based law bringing together laws governing different sectors of the financial system.
The draft Code seeks to move away from the current sector-wise regulation to a system where the RBI
regulates the banking and payments system. A Unified Financial Agency subsumes existing regulators
like the Securities and Exchange Board of India (SEBI), the Insurance Regulatory and Development
Authority of India (IRDAI), PFRDA, International Financial Services Centers Authority (IFSCA) and
Forward Markets Commission (FMC) to regulate the rest of the financial markets. (However, there
must be differential focuses on ‘prudential’ regulatory requirements and ‘conduct’ issues). IFC also
envisages a seller-beware market. The RBI is relieved of its public debt management role.

‘Solutioning’ should replace the current ‘supply paradigm’, and TECHFIN must be geared up along
with Web 3.0. which would necessitate financial regulators to build a framework for the ‘future of
finance’. Environment, Social and Governance (ESG), anyway, demands higher attention and regulatory
scrutiny.

Historically, finance has always been international in character. The financial architecture, with
financial inclusion as its archetype, must raise state capacity within and without and go full hog. It
requires a whole-of-the-government approach and a committed political capital.