ndian inan ial     ar et    11.13
     security market of India is regulated by SEBI. India   QuAsi-regulAtory Agencies
     has developed a regulated ‘forward market’ also
                                                            Several other government bodies perform
     where hunderds of commodities and derivatives
                                                            quasi-regulatory functions—National Bank for
     are traded on spot and non-spot basis—regulated
                                                            Agriculture and Rural Development (NABARD),
     by FMC which merged into SEBI by late 2015.
                                                            Small Industries Development Bank of India
                                                            (SIDBI), and National Housing Bank (NHB).
        FInancIal regulatIon                                NABARD supervises regional rural banks as well
     India has a multiple regulatory architecture in        as state and district cooperative banks. NHB
     the financial sector. The design has developed         regulates housing finance companies, and SIDBI
     complexities over the time due to: the number          regulates the state finance corporations (SFCs).
     of regulatory, quasi-regulatory, non-regulatory-
     but-still-regulating bodies; overlapping ambiguous     centrAl ministries
     operational design and their influence.24 A brief      Certain ministries of the GoI also involved in
     overview of the financial regulatory framework is      policy making in the financial system. Ministry
     being give here.                                       of Finance (MoF) is most prominently involved,
                                                            through its representatives on the Boards of SEBI,
     regulAtory Agencies                                    IRDA and RBI. MoF and Ministry of Small Scale
     India has product-wise regulators—Reserve              Industries have representatives on SIDBI Board,
     Bank of India (RBI) regulates credit products,         and Ministry of Urban Development is represented
     savings and remittances; the Securities and            on the NHB Board. MoF representatives are
     Exchange Board of India (SEBI) regulates               also on Boards of public sector banks (PSBs)
     investment products; the Insurance Regulatory          and Development Financial Institutions (DFIs).
     and Development Authority (IRDA) regulates             Forward Market Commission (FMC), which used
     insurance products; and the Pension Fund               to regulate the commodity exchanges and brokers,
     Regulatory and Development Authority (PFRDA)           under the Ministry of Consumer Affairs, shifted
     regulates pension products. The Forward Markets        to the Ministry of Finance in 2014 (merged with
     Commission (FMC) regulates commodity-based             the SEBI, MoF by September, 2015).
     exchange-traded futures (which was merged with
     the SEBI by late 2015).                                stAte governments
          Certain entities, primarily engaged in one        Through the Registrar of Cooperatives, who
     product (i.e., the insurance companies) also offer     are under the departments of agriculture and
     other products making it difficult for product-        cooperation, the state governments regulate the
     based regulation (this came to light in the PFRDA-     cooperative banking institutions in their respective
     IRDA controversy of early 2010s). Thus, most           states. The state government have also sometimes
     regulation turns out to be entity-based. Another       claimed a regulatory role in certain other cases.
     example is of cooperative banks, which, except in      Though it never became an open battle, the
     terms of their ownership structure, are very much      Andhra Pradesh government’s Ordinance
     like other banks—they take deposits and give           directing operations of Micro Finance Institutions
     loans. Still, their regulation is largely left to the  (MFIs)—many of them NBFCs registered with
     Registrar of Cooperatives.                             and regulated by RBI—falls into this space.
       24.  Financial Sector Legislative Reforms Commission      Such actions by state government have been
            report, March 2013, N. Delhi.                   matters of contention in the past as well, and