India 2018

232 India 2018
Commission, inter alia recommended a non-sectoral, principle-based legislative
architecture for the financial sector, by restructuring existing regulatory agencies
and creating new agencies, wherever needed, for better governance and
accountability. The recommendations of the Commission can broadly be
divided into two parts, legislative aspects and non-legislative aspects. The
legislative aspects of the recommendations relate to revamping the legislative
framework of the financial sector regulatory architecture by a non-sectoral,
principle-based approach and by restructuring existing regulatory agencies and
creating new agencies wherever needed. To this effect the Commission has
recommended a seven agency regulatory architecture, namely, Reserve Bank
of India, Unified Financial Agency, Financial Sector Appellate Tribunal,
Resolution Corporation, Financial Redress Agency, Public Debt Management
Agency and Financial Stability and Development Council in the Draft law-
Indian Financial Code to replace a number of existing laws. The non-legislative
aspects of the FSLRC recommendations are broadly in the nature of governance
enhancing principles for enhanced consumer protection, greater transparency
in the functioning of financial sector regulators.
Insolvency And Bankruptcy Code
A Bankruptcy Law Reforms Committee was set up on 22.8.2014 for providing
an entrepreneur friendly legal bankruptcy framework for India meeting global
standards for improving the ease of doing business with necessary judicial
capacity. Accordingly, the Insolvency and Bankruptcy Code, 2016 (IBC) became
operational in 2016. The Code aims to promote entrepreneurship, availability
of credit, and balance the interests of all the stakeholders by consolidating and
amending the laws relating to reorganization and insolvency resolution of
corporate persons, partnership firms and individuals in a time bound manner
and for maximization of value of the assets of such persons and matters
connected therewith or incidental thereto. It proposes a framework to ensure:
early detection of stress in a business; initiation of the insolvency resolution
process by debtor, financial creditor or operational creditor; liquidation of
unviable businesses; and avoiding destruction of value of failed business. The
Ministry of Corporate Affairs is taking further necessary steps for
implementation of the Code.
Financial Stability and Development Council
With a view to strengthening and institutionalizing the mechanism for
maintaining financial stability, enhancing inter-regulatory coordination and
promoting financial sector development, the Financial Stability and
Development Council (FSDC) was set up as the apex level forum in 2010. The
Council, inter-alia, monitors macro prudential supervision of the economy
including functioning of large financial conglomerates, and addresses interregulatory
coordination and financial sector development issues, including
issues relating to financial literacy and financial inclusion. The FSDC Secretariat
in Department of Economic Affairs provides secretarial support to the council.