RBI should be given power to regulate conglomerates: CFSA

The Government should come out with new legislation to empower Reserve Bank regulate financial conglomerates and holding companies in the country to ensure stability in the system, a Government report today said.

Presently, there is no legislation in the country specifically permitting regulation of financial conglomerates and holding companies.

"The Reserve Bank could, in the interests of financial stability, be armed with sufficient supervisory powers and monitoring functions in respect of financial conglomerates," the report of the Committee of Financial Sector Assessment said yesterday.

Financial conglomerates, such as ICICI and HDFC, control different businesses like insurance and mutual fund, through their holding companies.

The Government need to legislate new act to empower RBI to have regulatory jurisdiction of the holding company, the report said. Also, there was a need to strengthen the inter-regulatory co-operation and information-sharing arrangements both within and across borders among the regulators, the report said.