Mar 19, 2001|
Sebi, RBI, MoF: Where’s the grip?
The three ‘regulators’ – Sebi, RBI and Ministry of Finance (MoF), are trying to get a grip over the bears. Nevertheless, volatility in the markets continues to be as high as ever. Whether the regulators ultimately succeed or not, they would have failed in carrying out their responsibilities.
The Sebi will probably say that they do not have enough powers. The RBI may say that stock markets are not their domain. The babus at the MoF can always brush away the charges by saying that the Sebi and RBI need to control the capital markets. No excuses. Take none of this. The bottomline is that millions of investors (‘small’ mind you) have once again been ‘taken for a ride’. Not surprisingly, no concrete measures have been taken to bring the rogue traders to book.
In a diverse country like ours, to have a single opinion on an issue is impossible. However, there is an exception to this. It is largely believed (by all but interested parties) that ‘the government will time and again fail to deliver when it is called upon to do so’. Our record in bringing the guilty to book is pathetic. And, mind you, this is irrespective of the party in power. Therefore, change or no change, the plight of the people will remain the same. Only that by incurring election expenditure, the government will become still poorer, by a few hundred crore rupees.
What is probably required in the country is a super regulator, which has ‘complete powers’ as regards the functioning of the capital markets. This would be in line with Britain, which set up the Financial Services Authority (FSA) a few years back. This body would have broad representation comprising representatives of the Sebi, MoF, RBI and other bodies. Also, with a pooling in of resources, this body would probably be able to take more proactive decisions, and have the power to implement them.
For such a body to be formed, however, our politicians will need to give up the habit of micro managing the capital markets. They would need to focus on the macro policy matters, which are crying out for their attention (agriculture, for example). Now, this is probably too much to ask for, from our highly learned friends in power (and opposition). But who knows, the winds of change might just blow over our pathetic lot.
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