Of late banking and financial sector reforms and legislations are on the list of Union Finance Minister Pranab Mukherjee. The banking regulation amendment act has been approved by the cabinet, chief information officers (CIOs) have been made mandatory for banks in India, a steering committee on information security has been made mandatory for banks in India by RBI, etc.Further, information and communication technology (ICT) would also play a more pro active role in the future banking and financial sector of India, says Praveen Dalal, managing partner of Perry4Law and leading techno legal expert of India. The Cyber Law of India carries provisions regarding e-governance and e-commerce and the draft Electronic Delivery of Services Bill 2011 mandates the government of India to provide electronic services, informs Dalal.
In this background, the government of India has taken another significant step. Recently a resolution has been passed by Government of India for the constitution of Financial Sector Legislative Reforms Commission (FSLRC) of India. The constitution of FSLRD was announced by the Union Finance Minister Shri Pranab Mukherjee in his budget speech of 2010-11.
The main objective of constitution of FSLRC is to rewrite and harmonise financial sector legislations, rules and regulations. This had become necessary as the institutional framework governing India’s financial sector was built over a century and the same has become redundant for the contemporary requirements.
A need has been continuously felt to rewrite and streamline the financial sector laws, rules and regulations and to bring them in harmony with the requirements of India’s fast growing financial sector.
There are over 60 Acts and multiple Rules/Regulations in the sector and many of them date back decades when the financial landscape was very different from what is obtaining today. Large number of amendments made in these Acts over time has increased the ambiguity and complexity of the system. It is therefore required to sort out these ambiguities and complexities and enact suitable financial sector rules, regulations and legislations.
The Com FSLRC has been assigned the role to simplify and rewrite financial sector legislations, including subordinate legislations, to achieve harmony and synergy among them. This will remove ambiguity, regulatory gaps and overlaps among the various legislations making them more coherent and dynamic and help cater to the requirements of a large and fast growing economy in tune with the changing financial landscape in an inter-connected financial world. In the long-term, it would help usher in the next generation of reforms, contribute to efficient financial intermediation enhancing the growth potential of the nation.
FSLRC would also examine issues of data privacy and protection of consumer of financial services in the Indian market. Further, FSLRC would also analyse role of information technology in the delivery of financial services in India, and their effectiveness.
The role assigned to FSLRC is very important and let us hope it would fulfill its objectives, roles and responsibilities.
