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Wednesday, January 04, 2017

Banking Awareness 2017 - Financial Regulators of India

Hello and welcome to exampundit. So here are the Financial Regulators in India. This article was written by our mentor "Ruchi".


Full Form- Reserve Bank Of India

Establishment- April 1, 1935 as per the Reserve Bank of India Act, 1934 on the recommendation of Hilton Young Commission.

Nationalization- 1st Jan 1949

Headquarters- Mumbai

Emblem of RBI- Panther and Palm Tree.

Governors – Urjit Ravindra Patel (2016 – )

Former Governor- Dr. Raghuram Rajan- 23rd Governor (2011-2016)

  1. Sole Authority to issue Bank Notes in India.
  2. Prints currency in 15 languages.
  3. At present, 90 bank + Bhartiya Mahila Bank in the second schedule of RBI Act,  1934.
  4. It formulates, implements and monitors the monetary policy as well as it has to ensure an adequate flow of credits to productive sectors.
  5. Bankers to the Government: Performs merchant banking function for the central and the state governments, also act as a banker.
  6. Transfer funds and settle inter-bank transactions.
  7. All Bank operating in the country have accounts with the Reserve Bank.
  8. It acts as a custodian and manages the Foreign Exchange Act, (FEMA) 1999.
  9. RBI buys and sells foreign currency  to maintain the exchange rate of Indian Rupee v/s foreign currencies like the US Dollar, Euro, Pound and Japanese Yen.
  10. Credit Control  is a major weapon of the RBI used to control Demand  & Supply of money in the economy.

Other Functions-
  • RBI has a separate Department of statistics for collecting, compiling and disseminating statistical information and conducting research related to bank and other financial sectors of the economy including supply of money, credit banking operation and foreign exchange.
  • RBI act and Bank Act have both conferred extensive powers of regulations & supervisions to the RBI over commercial & cooperative banks to check malpractices & protect interests of the investors.
  • RBI has been aiding development & promoting saving & Banking habits. Development of the institutional agriculture and other rural activities has been an area of focus right from its inception.

Policy Rates at present- as of 4 January, 2017
  • Repo Rate- 6.25%
  • Reverse Repo rate- 5.75%
  • Marginal Standing Facility Rate or MSFR- 6.75%
  • Bank Rate- 6.75%
  • CRR- 4%
  • SLR- 20.75%
  • Base Rate: 9.30% - 9.65%
  • MCLR (Overnight): 8.65% - 9.00%
  • Saving Deposit Rates- 4.00%
  • Term Deposit Rate> 1year- 8.00-8.50%


Full form- Securities and Exchange Board of India.

Establishment- Set up by GOI in 1988,
April 2, 1992 (Legal Status)

Jurisdiction-  Government of India.

Headquarters- Bandra-Kurla Complex, Bandra, Mumbai.

Head of SEBI- Upendra Kumar Sinha –Chairman and MD

Opening Remarks- " protect the interests of investors in securities and to promote the development of, and to regulate the securities market and for matters connected therewith or incidental thereto"

Functions of SEBI-
  • Regulating the business in stock exchanges and any other securities markets.
  • Registering and regulating the working of stock brokers, sub- brokers, share transfer agents, bankers to an issue, trustees of trust deeds, registrar to an issue, merchant, bankers, portfolio managers, investment advisers.
  • Prohibiting fraudulent and unfair trade practices relating to securities markets.
  • The duty of the Boards to protect the interests of investors in securities and to regulate the securities market.

Responsibilities of SEBI

SEBI has to be responsive to the needs of three groups, which constitute the market:
  • The issuers of securities
  • The investors
  • The market intermediates

Departments of SEBI
  1. Market Intermediaries Regulation and supervision Department ( MIRSD)
  2. Market Regulation Department (MRD)
  3. Derivatives and New Product Department (DNPD)
  4. Corporation Finance Department (CFD)
  5. Investment Management Department (IMD)
  6. Integrated Surveillance Department (IVD)
  7. Legal Affairs Department (LAD)


Full form: Insurance Regulatory and Development Authority of India

Establishment- By an act enacted by Indian Parliament known as IRDA Act 1999 and was amended in 2002.

Headquarters- Hyderabad, Telangana

Head of IRDA- Mr. T.S. Vijayan –Chairman

Opening Remarks- "to protect the interests of the policyholders, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto."

Functions of IRDA
1.                  Registration (licensing) including renewal of registration of insurance companies.
2.                  Licensing of insurance intermediaries such as agents, surveyors and loss assessors, third party administrators, brokers, etc.
3.                  Official approval of agents training institutions.
4.                  Monitoring all non-tariff products including pricing of products, terms and conditions thereof, etc.
5.                  Supervision of the functioning of the companies and intermediaries including review of company annual statements.
6.                  Formulation of regulations.
7.                  Enforcement of discipline.


Full form-Pension Fund Regulatory and Development Authority

Establishment- August 23, 2003 by GOI.

Headquarters- New Delhi

Parent Agency- Ministry of Finance

Head of PFRDA- Shri Hemant G Contractor. Chairman

Opening Remarks- “To establish and promote pension system to serve the old age income needs of all citizens through guided development and prudent regulation of the pension industry, with focus on institution-building, capacity development and enabling framework for innovations in products, schemes and programs across all stakeholders and market participants, in the best interest of the subscribers and the pension system.”

Functions of PFRDA       

The functions and powers of the Authority includes-
1.   Regulating the National Pension System and the pension schemes.
2.   Approving the schemes, terms and conditions thereof and laying down norms of the management of the corpus of the pension funds.
3.   Registering and regulating intermediaries,
4.   Issuing to an intermediary, on application, a certificate of registration and renewing, modifying, withdrawing, suspending or cancelling such registration.
5.   Protecting the interests of subscribers by- (a) ensuring safety of the contribution of subscribers to various schemes of pension funds, (b) ensuring the intermediation and other operational costs under the National Pension System are economical and reasonable.
6.   Establishing mechanism for redressal of grievances of subscribers to be determined by regulations.
7.   Promoting Professional organizations connected with the pension system.
8.   Adjudication of disputes between intermediaries and between intermediaries and subscribers.
9.   Collecting data and requiring the intermediaries to collect such data and undertaking, commissioning studies, research and projects.


Full Form- Ministry of Corporate affairs

Jurisdiction- Republic of India

Headquarters- Shastri Bhawan, New Delhi

Agency Executive- Mr. Arun Jaitley, Minister of Corporate Affiars

The Ministry of Corporate Affairs (MCA) is an Indian government ministry. The Ministry is primarily concerned with administration of the Companies Act 2013, the Companies Act 1956, the Limited Liability Partnership Act, 2008 & other allied Acts and rules & regulations framed there-under mainly for regulating the functioning of the corporate sector in accordance with law. 

It is responsible mainly for regulation of Indian enterprises in Industrial and Services sector. 

  Click here for the Banking Awareness 2017 Page (COMING SOON)



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