Financial regulations

We all are aware of the term finance, and we use finance in our everyday lives. But have you ever thought that if there would be no laws on the finance industry, how would our funds be safe?
Every country needs to have a set of rules and laws to protect the citizens from fraud and safeguard the wealth of the country. But, financial regulations are the rules that are enforced on the insurance companies, banks, credit unions, and the investment companies.
If we talk about Indian financial regulations, then the system has primarily five regulatory bodies that look out the functioning of the market more competently.
It is quite necessary that the trading of funds take place without risks and are under appropriate laws. Financial regulations ensure that the commercial companies such as the insurance companies, banks, etc. treat the customers in an authorised way and look after the complaints and queries of the customers too.
In other words, we can call financial regulations as the ‘gatekeeper’ of the financial system for its better governance in the country. In the world of financial regulations, financial institutions have a set of goals they must follow for a productive and efficient economy.
Let us know discuss the financial regulators that monitor the economy of the country.
Securities market and the money supply is under Reserve Bank of India (RBI) and Securities Exchange Board of India (SEBI).
As an apex regulatory institution, it is the duty of Reserve Bank of India (RBI) to control all the money supply that takes place and keeps the record of GDP and inflation in the country. RBI monitors the Formulation of bank credit, public sector funding, and open market operations.
The second regulatory body that protects the interests of the customers/investors in security markets is the Securities Exchange Board of India (SEBI). SEBI is the regulatory body that monitors the working of the stock exchange market and all other security markets. The department of economic affairs and the department of company affairs primarily operated the security market.
But for the regulating the annuities industry, Insurance Regulatory and Development Authority of India (IRDAI) is an autonomous body for the growth of the insurance sector in India. It protects the interests of the policyholders by regulating rates, and the terms and conditions of the insurance.
Are you aware that there is a body for commodity regulation in our country?
Forward Market Commission of India (FMC) is a statuary body that takes decisions related to all the demand and supply in relation to prices. It keeps the record to forward it to the central government.
Conclusion
The financial regulations play a key role in framing the rules for the investors and is governed by the central government. Whenever the policies are changed, these financial bodies supervise.
Therefore, for the smooth working of the market, the financial regulations need to be enforced. In the financial industry, the factors liquidity, interest rates affect the markets very much. And if there would be no supervision, then it would be difficult to handle the demand.
An efficient financial market is governed by a regulatory body to monitor its working. Since the market is so huge, so, there is a need for some head body to maintain the stability of the market

Author: admin

Leave a Reply

Your email address will not be published. Required fields are marked *