'Big bang' financial reforms coming, says Jaitley

Finance minister Arun Jaitley on Saturday again promised that 'big bang' reforms were in the offing, including an overhaul of the legal framework for the financial sector.

Finance minister Arun JaitleyThe government is preparing to introduce many changes in laws, regulations and administrative rules to implement the recommendations of the Financial Sector Legislative Reforms Commission (FSLRC), Jaitley said at a function in Mumbai.

Jaitley was addressing a national seminar on the Indian Financial Code, organised by the Institute of Company Secretaries of India and the Bombay Stock Exchange.

The FSLRC, headed by retired Supreme Court judge B N Srikrishna, had in March last year, submitted a report on revamping the laws governing the financial sector. The committee was set up in March 2011 to bring financial laws in sync with modern business.

Besides preparing a model Indian financial code with an emphasis on consumer protection, the committee had recommended the formation of an appellate tribunal to hear appeals against orders of financial sector regulators.

The commission had also recommended a non-sectoral, principle-based legislative architecture for the financial sector through restructuring and upgrade of existing regulatory agencies, and creating new agencies wherever needed for better governance and accountability.

In September, the National Democratic Alliance government at the centre had formed task forces to work on the FSLRC recommendations.

Jaitley said the four expert groups are currently examining the various aspects of the committee's suggestions, as many changes to existing laws and regulations might be required.

The task forces would prepare a roadmap for upgrading existing agencies and establishing new agencies - the Financial Sector Appellate Tribunal, Resolution Corporation, Public Debt Management Agency and Financial Data Management Centre.

The FSLRC recommendations have come under a severe criticism from regulators like Reserve Bank of India, which fear a shrinking of their jurisdictions. In June, RBI governor Raghuram Rajan had opposed FSLRC's proposal to merge regulators. The recommendation was not based on a deep analysis, Rajan had said.