Territorial battles between various financial sector regulators in India have come out in the open in recent months. The proposal for an apex Financial Stability and Development Council headed by the finance minister has added to the friction.
Against this background, the action taken by the Securities and Exchange Board of India (Sebi) against the promoters of Bank of Rajasthan for allegedly violating the upper limit a private promoter can hold in a bank is an excellent example of two regulators working in tandem.
The detailed Sebi order states right in the beginning that the investigation into the Tayal family began with a tip-off from the Reserve Bank of India (RBI). The order also says that “RBI provided details of movement of funds from the Tayal group to...front companies of the Tayal group”.
Even as the battles over who should regulate unit-linked insurance plans or exchange-traded derivatives continue, it is good to see the banking regulator and the securities market regulator work together so well on an investigation.