New Delhi, 5 April (IANS). The Securities and Exchange Board of India (SEBI) on Saturday cited the latest report of IMF-Financial System Stability Assessment (FSSA), saying India’s financial system has become more flexible and diverse due to rapid economic growth.
At the same time, regulatory framework in securities markets to manage and prevent emerging risks has been improved in accordance with international practice.
The market regulator said in a statement that the financial sector in India has encountered the epidemic by recovering from various crises of the 2010s.
Citing the findings of the IMF report, SEBI said, “In the context of the development of the financial sector landscape, the non-banking financial mediator (NBFI) sector has become diverse, but more interconnected. Banks and non-banking financial companies (NBFCs) have sufficient capital to give medium loans in serious macro-finance landlords.”
On NBFC’s regulation and supervision, the IMF accepted India’s systematic approach to NBFC’s prudent needs with a scale -based regulatory framework.
The IMF also appreciated India’s approach on the introduction of bank line liquidity coverage ratio (LCR) for large NBFCs.
For the supervision of banks, IMF has advised to adopt IFSR 9 and upgrade supervision on individual loans, collateral valuation, connected borrower groups, large risk boundaries and related party transactions.
The report further states that major reforms include the establishment of Corporate Date Market Development Fund (CDMDF), the introduction of swing pricing and liquidity requirements for bond mutual funds.
According to the IMF-FSSA report, regulatory scope has also been expanded in emerging areas such as stability for rapidly growing equity derivative products and investor safety measures.
According to SEBI, “FSSA reports that India’s insurance sector is strong and on the path of development, which has a significant presence in both life and general insurance. Supported by better regulation and digital innovation, the region remains stable.”
The report mentions the progress of monitoring, risk management and improvement in governance by India.
-IANS
SKT/ABM
