The Indian financial system is regulated by independent regulators also called statutory bodies in India in the field of banking, capital market, commodities market, insurance, pension funds, trade, telecom and electricity.

However, Government of India plays a significant role in controlling the Indian financial system and influences the roles of such regulators at least to some extent and plays a key role in financial regulation.

1. Reserve Bank of India

RBI was established on April 1, 1935 under RBI Act, 1934 under the recommendation by Hilton Young Commission. It is headquartered in Mumbai having offices at 31 locations throughout India.

RBI is composed under General superintendence & direction by 21-member Central Board of Directors: the Governor, 4 Deputy Governors, 2 Finance Ministry representatives, 10 government-nominated directors to represent important elements of India’s economy, and 4 directors to represent local boards headquartered at Mumbai, Kolkata, Chennai and New Delhi.

RBI issues bank notes of all denominations. As an agent of the Government of India, it has right to distribute one rupee notes & the small coins throughout the country and stands one of the most important Financial Regulatory Bodies in India and also called the Apex Bank of India.

2. Security & Exchange Board of India

SEBI full form is Security and Exchange Board of India, which was established in 1988 through an executive resolution and then upgraded as a fully autonomous body (a statutory Board) in 1992 with the passing of the Securities and Exchange Board of India Act on 30th January 1992.

It is headquartered in Mumbai & has Northern, Eastern, Southern and Western Regional Offices in New Delhi, Kolkata, Chennai and Ahmedabad respectively having local offices at Jaipur and Bangalore.

It protects the interest of investor, provide safety of investment, check price rigging, prohibit insider trading, fraudulent and unfair trade practices etc. Since this deals with stock market and other financial activities of market, this is one of the most significant Financial Regulatory Bodies in India.

Forward markets commission or FMC was a regulatory authority for commodity futures market in India under the Ministry of Consumer Affairs, Food and Public Distribution. FMC has been merged with SEBI to streamline the regulations and curb wild speculations in the commodity market.

3. Insurance Regulatory & Development Authority

IRDA full form is Insurance Regulatory and Development Authority, which was constituted under the Insurance Regulatory and Development Authority Act, 1999. It is headquartered in Hyderabad, Telangana.

It is composed of Chairman & nine members of whom five are whole-time members and four are part-time members. All the members including the Chairman are appointed by the government of India.

It is an autonomous, statutory agency to regulate and promote the insurance and re-insurance industry and to safeguard the interest of and secure fair treatment to insurance policy holders as well as issue a certificate of registration, & renew, modify, withdraw, suspend or cancel such registration of insurance companies.

IRDA is one of the most important Financial Regulatory Bodies in India which controls all types of Life Insurances and General Insurances and its claims in India.

The IRDA Act, 1999, Malhotra Committee report (1994) recommended to establish an independent regulatory authority for insurance sector in India, then it was formed and incorporated as a statutory body in April, 2000.

The IRDA Act, 1999 also allows private companies to enter into the insurance sector in India besides a maximum foreign equity of 26 per cent in a private insurance company having operations in India.

Services: It serves as an Authority to protect the interests of holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith.

IRDA Duties, Powers and Functions

• IRDA can Issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration.
• IRDA Protects the interests of the policyholders in matters concerning assigning of policy, nomination by policyholders, insurable interest, settlement of insurance claim, surrender value of policy and other terms and conditions of contracts of insurance.
• IRDA specifies requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents
• IRDA specifies the code of conduct for surveyors and loss assessors.
• IRDA promotes efficiency in the conduct of insurance business.
• IRDA promotes and regulates professional organizations connected with the insurance and reinsurance business.
• IRDA controls and regulates the rates, advantages, terms and conditions that may be offered by insurers in respect of general insurance business
• IRDA specifies the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by insurers and other insurance intermediaries
• IRDA regulates investment of funds by insurance companies, regulates maintenance of margin of solvency, adjudicates the disputes between insurers and intermediaries or insurance intermediaries, supervises the functioning of the Tariff Advisory Committee, specifies the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organizations, specifies the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural or social sector and exercises other powers as may be needed.

4. Pension Fund Regulatory & Development Authority

PFRDA full form is Pension Fund Regulatory and Development Authority, which was established on August 23, 2003. The Pension Fund Regulatory & Development Authority Act was passed on 19th September, 2013.

It is headquartered in New Delhi to perform promotional, developmental and regulatory functions relating to pension funds. This is one of the most important Financial Regulatory Bodies in India which controls employee pension fund and its regulations, claims among the companies.

5. Competition Commission of India

CCI full form is Competition Commission of India, which was established on 14th October 2003 under the Competition Act, 2002.

It is headquartered in New Delhi composed of a Chairperson and 6 Members appointed by the Central Government. It enables common man with the broadest range of goods and services at the most competitive prices.

6. Telecom Regulatory Authority of India

TRAI full form is Telecom Regulatory Authority of India, was established on 20 February 1997 to regulate telecom services and tariffs. Earlier it was done by the Central Government. It is headquartered in New Delhi, composed of a Chairman and at least two and at the most six members, all appointed by the Central Government.

TRAI regulates telecommunications and DTH operations in India and becomes one of the most important Financial Regulatory Bodies in India among the telecom and DTH consumer section.

According to the TRAI act, amended in 2000, the functions of the TRAI have now been divided between two separate bodies namely-

1. The Telecom Regulatory Authority of India (TRAI) and
2. The Telecom Disputes Settlement and Appellate Tribunal.

7. Central Electricity Regulatory Commission

Since electricity is one of the key drivers for rapid economic growth and poverty alleviation, Central Electricity Regulatory Commission (CERC) has been set up in 1998 as a statutory body functioning with quasi-judicial status to promote competition, efficiency and economy in bulk power markets, improve the quality of supply, promote investments and advise government on the removal of institutional barriers to bridge the demand supply gap and thus foster the interests of consumers.