New Delhi: Amid the Reserve Bank of India (RBI) expressing reservations over the unit linked insurance plan (Ulip) ordinance, the finance ministry on Tuesday said a bill to replace the ordinance would be placed in the forthcoming session of Parliament beginning 26 July.
“Regulators have raised their points of view. The finance minister has taken note of those issues. The ordinance in whatever form has to be placed before Parliament. It is matter of a few days when this (bill) will be tabled and everybody would know what the future course of action on this particular piece of regulation is,” finance secretary Ashok Chawla said.
After market watchdog Securities & Exchange Board of India (Sebi) and insurance regulator Insurance Regulatory and Development Authority (Irda) locked horns over jurisdiction of Ulips, the government issued an ordinance giving Irda the powers to regulate these schemes.
Ulips are insurance schemes whose value is linked to the market value of shares they have been invested in.
However, a few days later RBI governor D Subbarao met finance minister Pranab Mukherjee and suggested the government to reconsider the ordinance.
“I have come to meet the finance minister in connection with the ordinance that they have issued regarding settlement of the dispute on regulatory jurisdiction. The RBI has certain reservations and concerns, which we have expressed in the letter,” Subbarao had said after the meeting.
Currently, inter-regulatory issues are looked into by a High Level Coordination Committee, comprising financial sector watchdogs and finance ministry officials and is headed by RBI.
Later, Pranab Mukherjee said his ministry will not intervene in the autonomy of regulators, amid reservations expressed by the Reserve Bank over the Ordinance on Ulips.
“The intentions are quite clear. We are not going to intervene in the autonomy of regulators,” Mukherjee had said.
To a query on sovereign wealth fund, Chawla said on the sidelines of a CII conference that the government has taken no decision in this regard.
“Proposal has been mooted by some people. We will consider carefully as there are both points, in favour and against. At this point, no decision has been taken,” he said.
On the status of the proposed Financial Stability and Development Council (FSDC) announced in Budget 2010-11, Chawla said, “FSDC...is supposed to be non-statutory forum of finance ministry and the regulators. So, its work is in progress. It will start meeting as and when necessary but it is not as if it has to go through any legislative process.”
Some regulators are understood to have expressed reservations over any kind of role as an arbiter for the proposed body.