Financial regulation in India is governed by a number of regulatory bodies. Financial regulation is a form of

regulation Regulation is the management of complex systems according to a set of rules and trends. In systems theory, these types of rules exist in various fields of biology and society, but the term has slightly different meanings according to context. For ...

or supervision, which subjects

financial institution Financial institutions, sometimes called banking institutions, are business entities that provide services as intermediaries for different types of financial monetary transactions. Broadly speaking, there are three major types of financial insti ...

s to certain requirements, restrictions and guidelines, aiming to maintain the stability and integrity of the

financial system A financial system is a system that allows the exchange of funds between financial market participants such as lenders, investors, and borrowers. Financial systems operate at national and global levels. Financial institutions consist of complex, c ...

. This may be handled by either a

government A government is the system or group of people governing an organized community, generally a state. In the case of its broad associative definition, government normally consists of legislature, executive, and judiciary. Government is a ...

or non-government organization. Financial regulation has also influenced the structure of banking sectors by increasing the variety of financial products available. Financial regulation forms one of three legal categories which constitutes the content of

financial law Financial law is the law and regulation of the commercial banking, capital markets, insurance, derivatives and investment management sectors. Understanding financial law is crucial to appreciating the creation and formation of banking and financ ...

, the other two being market practices and

case law Case law, also used interchangeably with common law, is law that is based on precedents, that is the judicial decisions from previous cases, rather than law based on constitutions, statutes, or regulations. Case law uses the detailed facts of a l ...

History

The history of

financial regulation Financial regulation is a form of regulation or supervision, which subjects financial institutions to certain requirements, restrictions and guidelines, aiming to maintain the stability and integrity of the financial system. This may be handled ...

in India can be traced back to the early 19th century when the British

East India Company The East India Company (EIC) was an English, and later British, joint-stock company founded in 1600 and dissolved in 1874. It was formed to trade in the Indian Ocean region, initially with the East Indies (the Indian subcontinent and Southea ...

established the

Bank of Bengal The Bank of Calcutta (a precursor to the present State Bank of India) was founded on 2 June 1806, mainly to fund General Wellesley's wars against Tipu Sultan and the Marathas. It was the first bank of India and was renamed Bank of Bengal on ...

in 1806. Over time, other banks were established, including the

Bank of Bombay The Bank of Bombay was the second of the three presidency banks (others being the Bank of Calcutta and the Bank of Madras) of the Raj period. It was established, pursuant to a charter of the British East India Company, on 15 April 1840. The ba ...

in 1840 and the

Bank of Madras The Bank of Madras was one of the three Presidency Banks of British India, along with the Bank of Bengal and the Bank of Bombay. It was established on 1 July 1843 through the amalgamation of a number of existing regional banks and headquartere ...

in 1843, which collectively came to be known as the Presidency Banks. In 1921, the three Presidency Banks were merged to form the

Imperial Bank of India The Imperial Bank of India (IBI) was one of the oldest and the largest commercial bank of the Indian subcontinent, and was subsequently transformed into the State Bank of India in 1955. Initially, as per its royal charter, it acted as the cen ...

, which was later nationalized and renamed as the

State Bank of India State Bank of India (SBI) is an Indian multinational public sector bank and financial services statutory body headquartered in Mumbai, Maharashtra. SBI is the 49th largest bank in the world by total assets and ranked 221st in the ''Fortune ...

in 1955. The

Reserve Bank of India The Reserve Bank of India, chiefly known as RBI, is India's central bank and regulatory body responsible for regulation of the Indian banking system. It is under the ownership of Ministry of Finance, Government of India. It is responsible for ...

was established in 1935 as the central bank of the country, with the objective of regulating the

currency A currency, "in circulation", from la, currens, -entis, literally meaning "running" or "traversing" is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins. A more general def ...

and credit system of the country and promoting its economic growth. After

India India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...

gained independence in 1947, the government took several steps to

regulate Regulate may refer to: * Regulation * '' Regulate...G Funk Era'', an album from rapper Warren G ** Regulate (song), title song from the album See also * * * Regulator (disambiguation) Regulator may refer to: Technology * Regulator (automati ...

the

financial sector Financial services are the economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, accountancy companies, ...

. In 1949, the Banking Regulation Act was passed, which gave the

greater control over the functioning of banks and other financial institutions. The

Securities and Exchange Board of India The Securities and Exchange Board of India (SEBI) is the regulatory body for securities and commodity market in India under the ownership of Ministry of Finance within the Government of India. It was established on 12 April 1988 as an executive ...

(SEBI) was established in 1988 to regulate the

securities markets A capital market is a financial market in which long-term debt (over a year) or equity-backed securities are bought and sold, in contrast to a money market where short-term debt is bought and sold. Capital markets channel the wealth of saver ...

and protect the interests of investors. In the 1990s, India embarked on a program of

economic liberalization Economic liberalization (or economic liberalisation) is the lessening of government regulations and restrictions in an economy in exchange for greater participation by private entities. In politics, the doctrine is associated with classical liber ...

and reforms, which included significant changes in the

. The Narasimham Committee was set up in 1991 to examine the state of the

and make recommendations for its reform. Based on the recommendations of the committee, several measures were taken to liberalize the

and promote competition. In 1993, the Securities and Exchange Board of India Act was passed, which gave SEBI statutory powers to regulate the

securities market Security market is a component of the wider financial market where securities can be bought and sold between subjects of the economy, on the basis of demand and supply. Security markets encompasses stock markets, bond markets and derivatives mar ...

s. In 1997, the

Insurance Regulatory and Development Authority The Insurance Regulatory and Development Authority of India (IRDAI) is a regulatory body under the jurisdiction of Ministry of Finance , Government of India and is tasked with regulating and licensing the insurance and re-insurance industrie ...

(IRDA) was established to regulate the insurance sector. The

Pension Fund Regulatory and Development Authority Pension Fund Regulatory and Development Authority is the regulatory body under the jurisdiction of Ministry of Finance , Government of India for overall supervision and regulation of pension in India. The Government of India had, in the year 199 ...

(PFRDA) was established in 2003 to regulate the pension sector.

Chornology

Timeline of Indian Financial Regulations: * 1806: The

is established by the British

. * 1840-1843: The

and the

are established, which together with the

, came to be known as the Presidency Banks. * 1921: The three Presidency Banks are merged to form the

. * 1935: The

is established as the

central bank A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union, and oversees their commercial banking system. In contrast to a commercial bank, a central ba ...

of the country. * 1947:

gains

independence Independence is a condition of a person, nation, country, or state in which residents and population, or some portion thereof, exercise self-government, and usually sovereignty, over its territory. The opposite of independence is the statu ...

from British rule. * 1949: The Banking Regulation Act is passed, which gives the

greater control over the functioning of

bank A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets. Because ...

s and other

s. * 1955: The

is nationalized and renamed as the

. * 1988: The

(SEBI) is established to regulate the

and protect the interests of

investor An investor is a person who allocates financial capital with the expectation of a future Return on capital, return (profit) or to gain an advantage (interest). Through this allocated capital most of the time the investor purchases some specie ...

s. * 1991: The Narasimham Committee is set up to examine the state of the

and make recommendations for its reform. Based on the recommendations of the committee, several measures are taken to liberalize the

and promote competition. The Securities and Exchange Board of India (SEBI) Act is also passed. * 1992: The

(SEBI) is given statutory powers under the SEBI Act. * 1993: The Securities and Exchange Board of India Act is passed, which gives SEBI statutory powers to regulate the

. * 1997: The

(IRDA) is established to regulate the insurance sector. * 1999: The National Stock Exchange (NSE) introduces

electronic trading In finance, an electronic trading platform also known as an online trading platform, is a computer software program that can be used to place orders for financial products over a network with a financial intermediary. Various financial products c ...

, which revolutionizes the Indian stock market. * 2000: The

(SEBI) introduces regulations for internet trading and dematerialization of securities. * 2003: The

(PFRDA) is established to regulate the pension sector. * 2005: The Forward Contracts Regulation Act (FCRA) is passed to regulate the commodity futures market. * 2012: The

(SEBI) introduces the concept of

Real Estate Investment Trusts A real estate investment trust (REIT) is a company that owns, and in most cases operates, income-producing real estate. REITs own many types of commercial real estate, including office and apartment buildings, warehouses, hospitals, shopping cente ...

(REITs) to enable

s to invest in the real estate sector through a regulated mechanism. * 2015: The

announces the introduction of the

Unified Payments Interface Unified Payments Interface (UPI) is an instant real-time payment system developed by National Payments Corporation of India (NPCI). The interface facilitates inter-bank peer-to-peer (P2P) and person-to-merchant (P2M) transactions. It is used o ...

(UPI) to facilitate digital payments in the country. * 2015: The

International Financial Services Centre The International Financial Services Centre (IFSC) is an area of central Dublin and part of the CBD established in the 1980s as an urban regeneration area and special economic zone (SEZ) on the derelict state-owned former port authority land ...

(IFSC) is set up at the Gujarat International Finance Tec-City (GIFT City) to promote offshore

financial services Financial services are the Service (economics), economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, acco ...

in India. * 2019: The International Financial Services Centres Authority (IFSCA) is established to regulate

in the IFSCs in India. * 2020: The

announces a moratorium on loan repayments and a restructuring scheme for borrowers impacted by the COVID-19 pandemic.

SEBI The Securities and Exchange Board of India (SEBI) is the regulatory body for securities and commodity market in India under the ownership of Ministry of Finance within the Government of India. It was established on 12 April 1988 as an executive ...

introduces new norms for

investment adviser A financial adviser or financial advisor is a professional who provides financial services to clients based on their financial situation. In many countries, financial advisors must complete specific training and be registered with a regulatory ...

s and

portfolio manager A portfolio manager (PM) is a professional responsible for making investment decisions and carrying out investment activities on behalf of vested individuals or institutions. Clients invest their money into the PM's investment policy for future grow ...

s to enhance investor protection. * 2021: The

(SEBI) introduces a new framework for investment advisors to strengthen their role as fiduciaries to their clients. The

(RBI) sets up a committee to review the functioning of asset reconstruction companies (ARCs) and recommend measures to improve their effectiveness.

Acts and rules

has a comprehensive system of

s that includes a range of acts and rules to govern various aspects of the financial sector. Some of the key acts and rules that regulate the

in India include: *

Reserve Bank of India Act, 1934 Reserve Bank of India Act, 1934 is the legislative act under which the Reserve Bank of India was formed. This act along with the Companies Act, which was amended in 1936, were meant to provide a framework for the supervision of banking firms in ...

: This act provides the legal framework for the functioning of the

(RBI), which is the central bank of India. The RBI is responsible for regulating the

monetary policy Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, often a ...

of the country, managing the foreign exchange reserves, and supervising the banking sector. *

Banking Regulation Act, 1949 The Banking Regulation Act, 1949 is a legislation in India that regulates all banking firms in India. Passed as the Banking Companies Act 1949, it came into force from 16 March 1949 and changed to Banking Regulation Act 1949 from 1 March 1966. ...

: This act regulates the functioning of banks in India and empowers the RBI to supervise and regulate the banking sector. *

Securities and Exchange Board of India Act, 1992 The Securities and Exchange Board of India Act, 1992 is an act that was enacted for regulation and development of securities market in India. It was amended in the years 1995, 1999, and 2002 to meet the requirements of changing needs of the s ...

: This act established the Securities and Exchange Board of India (SEBI), which is responsible for regulating the securities market in India. * Insurance Regulatory and Development Authority Act, 1999: This act established the

(IRDA), which is responsible for regulating the insurance sector in India. *

Companies Act, 2013 The Companies Act 2013 is an Act of the Parliament of India on Indian company law which regulates incorporation of a company, responsibilities of a company, directors, dissolution of a company. The 2013 Act is divided into 29 chapters containin ...

: This act governs the formation, management, and operation of companies in India, including those in the financial sector. *

Foreign Exchange Management Act, 1999 The Foreign Exchange Management Act, 1999 (FEMA), is an Act of the Parliament of India "to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly d ...

: This act regulates foreign exchange transactions in India and aims to facilitate external trade and payments. *

Prevention of Money Laundering Act, 2002 Prevention of Money Laundering Act, 2002 is an Act of the Parliament of India enacted by the NDA government to prevent money-laundering and to provide for confiscation of property derived from money-laundering. PMLA and the Rules notified the ...

: This act aims to prevent money laundering and the financing of terrorist activities in India. * Securities Contracts (Regulation) Rules, 1957: These rules regulate the trading of securities in India and provide guidelines for the functioning of stock exchanges. * Insider Trading Regulations, 2015: These regulations aim to prevent insider trading in securities and promote fair trading practices. * Credit Information Companies (Regulation) Act, 2005: This act regulates the functioning of credit information companies in India and aims to promote responsible lending practices. * Payment and Settlement Systems Act, 2007: This act provides the legal framework for payment and settlement systems in India, including electronic funds transfer, mobile payments, and card payments. *

Consumer Protection Act, 2019 Consumer Protection Act, 2019 is an Act of the Parliament of India. It repeals and replaces the Consumer Protection Act, 1986. About The Consumer Protection Act , 2019 was introduced in the Lok Sabha as a replacement of Copra 1986 on 8 July 2 ...

: This act aims to protect the rights of consumers in India and includes provisions related to financial services, such as banking, insurance, and investment products. * National Pension System Trust Regulations, 2015: These regulations govern the functioning of the National Pension System (NPS) in India, which is a voluntary retirement savings scheme for individuals. * Depositories Act, 1996: This act regulates the functioning of depositories in India, which hold securities in electronic form and facilitate their transfer. * Public Financial Management System, 2016: This system is an online platform for the management of government finances in India, including budget preparation, expenditure management, and reporting. *

Foreign Contribution (Regulation) Act, 2010 The Foreign Contribution (regulation) Act, 2010 is an act of the Parliament of India, by the 42nd Act of 2010. It is a consolidating act whose scope is to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by ...

: This act regulates the receipt of foreign contributions by non-profit organizations in India and aims to prevent money laundering and financing of terrorism. * Prudential Norms for Classification, Valuation and Operation of Investment Portfolio by Banks, 2021: These norms provide guidelines for the management of investment portfolios by banks in India, including the classification and valuation of assets. * Reserve Bank of India (Digital Payment Security Controls) Directions, 2021: These directions provide security controls for digital payments in India, aimed at protecting users from fraud and other risks. *

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 The Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (also known as the SARFAESI Act) is an Indian law. It allows banks and other financial institutions to auction residential or commercial pr ...

: This act provides a framework for the securitisation and reconstruction of financial assets, and enforcement of security interest in such assets, by banks and financial institutions. * Indian Stamp Act, 1899: This act regulates the payment of stamp duty on various financial instruments, such as promissory notes, bills of exchange, and share certificates. *

Negotiable Instruments Act, 1881 Negotiable Instruments Act, 1881 is an act in India dating from the British colonial rule, that is still in force largely unchanged. History The history of the present Act is a long one. The Act was originally drafted in 1866 by the 3rd India ...

: This act governs the use of negotiable instruments, such as cheques, bills of exchange, and promissory notes, in financial transactions. * Prevention of Atrocities Act, 1989: This act provides for the prevention of offences against members of Scheduled Castes and Scheduled Tribes, and includes provisions related to financial fraud and exploitation of these communities. *

Real Estate (Regulation and Development) Act, 2016 The Real Estate (Regulation and Development) Act, 2016 is an Act of the Parliament of India which seeks to protect home-buyers as well as help boost investments in the real estate industry. The Act establishes a Real Estate Regulatory Authority ...

: This act regulates the real estate sector in India, including the registration of real estate projects and agents, and the protection of homebuyers. *

Micro, Small and Medium Enterprises Development Act, 2006 The Micro, Small and Medium Enterprises Development Act, 2006 is an Act of the Parliament of India The Parliament of India (International Alphabet of Sanskrit Transliteration, IAST: ) is the supreme legislative body of the Republic of Indi ...

: This act provides for the promotion and development of micro, small, and medium enterprises in India, including access to credit and other financial services. * Foreign Trade Policy, 2015-2020: This policy provides a framework for promoting exports and imports in India, including incentives for exporters and regulations for importers. * Prevention of Insolvency and Bankruptcy Act, 2016: This act provides for the resolution of insolvency and bankruptcy proceedings in India, including the restructuring of debts and liquidation of assets. * International Financial Services Centres Authority Act, 2019: It is an Indian legislation that provides for the establishment of an independent

regulatory authority A regulatory agency (regulatory body, regulator) or independent agency (independent regulatory agency) is a government authority that is responsible for exercising autonomous dominion over some area of human activity in a licensing and regulatin ...

for the development and regulation of

in International Financial Services Centres (IFSCs) in

.The IFSCA Act was enacted to promote the development of

in IFSCs in India, with the objective of making India a hub for

international finance International finance (also referred to as international monetary economics or international macroeconomics) is the branch of financial economics broadly concerned with monetary and macroeconomic interrelations between two or more countries. Inter ...

and business. The Act establishes the International Financial Services Centres Authority (IFSCA) as a statutory body to oversee the development and regulation of financial services in IFSCs.The IFSCA Act provides for a wide range of functions for the IFSCA, including the regulation and supervision of financial institutions and financial services in IFSCs, the promotion of development of financial services in IFSCs, and the protection of the interests of investors and consumers in IFSCs.The IFSCA Act also provides for the establishment of a unified regulatory framework for financial services in IFSCs, including banking, insurance, securities, and other financial services. The Act empowers the IFSCA to make regulations for the conduct of financial services in IFSCs, and also provides for the resolution of disputes related to financial services in IFSCs.

Regulatory bodies

India has several financial regulatory bodies that oversee and regulate different sectors of the financial system. Here are the major regulatory bodies and the sectors they oversee: #

(RBI): RBI is the

central bank of India Central Bank of India (CBI) is an Indian public sector bank based in Mumbai. Despite its name, it is not the central bank of India; The Indian central bank is the Reserve Bank of India. History The Central Bank of India was established on ...

and regulates the overall banking sector in the country, including commercial banks, cooperative banks, and development banks. #

(SEBI): SEBI is responsible for regulating the securities market in India, including

stock exchange A stock exchange, securities exchange, or bourse is an exchange where stockbrokers and traders can buy and sell securities, such as shares of stock, bonds and other financial instruments. Stock exchanges may also provide facilities for th ...

broker A broker is a person or firm who arranges transactions between a buyer and a seller for a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Neither role should be confu ...

s, and other market intermediaries. # International Financial Services Centres Authority (IFSCA): It is a

regulatory body A regulatory agency (regulatory body, regulator) or independent agency (independent regulatory agency) is a government authority that is responsible for exercising autonomous dominion over some area of human activity in a licensing and regulatin ...

that was established in April 2020 under the International Financial Services Centres Authority Act, 2019.The IFSCA is responsible for regulating all financial services that are provided within the

(IFSC) located in

GIFT City Gujarat International Finance Tec-City (GIFT City) is central business district under-construction in Gandhinagar and Ahmedabad in Gandhinagar district in Gujarat, India. It is India's first operational greenfield smart city and international ...

Gujarat Gujarat (, ) is a state along the western coast of India. Its coastline of about is the longest in the country, most of which lies on the Kathiawar peninsula. Gujarat is the fifth-largest Indian state by area, covering some ; and the ninth ...

, India. The IFSC is a

special economic zone A special economic zone (SEZ) is an area in which the business and trade laws are different from the rest of the country. SEZs are located within a country's national borders, and their aims include increasing trade balance, employment, increas ...

that was set up to promote international financial services in

. #

(IRDA): IRDA regulates the insurance sector in India, including life insurance, general insurance, and reinsurance. #

(PFRDA): PFRDA regulates the pension sector in India, including pension funds and the National Pension System. #

Forward Markets Commission The Forward Markets Commission (FMC) is the regulatory body for the commodity market and futures market in India. It is a division of the Securities and Exchange Board of India, Ministry of Finance, Government of India. As of July 2014, it reg ...

(FMC): FMC regulates the

commodity futures In finance, a futures contract (sometimes called a futures) is a standardized legal contract to buy or sell something at a predetermined price for delivery at a specified time in the future, between parties not yet known to each other. The asset ...

market in India. #

Ministry of Corporate Affairs The Ministry of Corporate Affairs is an Indian government ministry primarily concerned with administration of the Companies Act 2013, the Companies Act 1956, the Limited Liability Partnership Act, 2008, and the Insolvency and Bankruptcy Code, 201 ...

(MCA): MCA regulates

corporate governance Corporate governance is defined, described or delineated in diverse ways, depending on the writer's purpose. Writers focused on a disciplinary interest or context (such as accounting, finance, law, or management) often adopt narrow definitions th ...

corporate social responsibility Corporate social responsibility (CSR) is a form of international private business self-regulation which aims to contribute to societal goals of a philanthropic, activist, or charitable nature by engaging in or supporting volunteering or ethicall ...

, and the formation and management of companies in India. #

National Housing Bank National Housing Bank (NHB), is the apex regulatory body for overall regulation and licensing of housing finance companies in India. It is under the jurisdiction of Ministry of Finance , Government of India. It was set up on 9 July 1988 under t ...

(NHB): NHB regulates housing finance companies and the housing sector in India. # Department of Economic Affairs (DEA): DEA is responsible for the overall economic policies of India, including fiscal and monetary policies. #

Financial Stability and Development Council Financial Stability and Development Council (FSDC) is an apex-level body constituted by the government of India. The idea to create such a super regulatory body was first mooted by the Raghuram Rajan Committee in 2008. Finally in 2010, the then ...

(FSDC): The FSDC is a high-level coordinating body that oversees and coordinates the functioning of various financial regulatory bodies in India. It aims to ensure financial stability and promote financial sector development in the country. #

Deposit Insurance and Credit Guarantee Corporation Deposit Insurance and Credit Guarantee Corporation (DICGC) is a specialised division of Reserve Bank of India which is under the jurisdiction of Ministry of Finance, Government of India. It was established on 15 July 1978 under the Deposit In ...

(DICGC): The DICGC provides insurance to depositors in case a bank fails or becomes insolvent. It insures bank deposits up to a certain amount, which is currently set at Rs. 5 lakhs per depositor per bank. #

National Bank for Agriculture and Rural Development National Bank for Agriculture and Rural Development (NABARD) is an apex regulatory body for overall regulation of regional rural banks and apex cooperative banks in India. It is under the jurisdiction of Ministry of Finance, Government of India ...

(NABARD): NABARD regulates and supervises the rural banking sector in India. It provides credit and other support to farmers, rural development organizations, and other rural institutions. #

Small Industries Development Bank of India Small Industries Development Bank of India (SIDBI) is the apex regulatory body for overall licensing and regulation of micro, small and medium enterprise finance companies in India. It is under the jurisdiction of Ministry of Finance , Governm ...

(SIDBI): SIDBI provides financial assistance to small and medium-sized enterprises (SMEs) in India. It also promotes the development of the SME sector in the country. # Insurance Ombudsman: The Insurance Ombudsman is an independent grievance redressal mechanism for insurance policyholders. It investigates and resolves complaints against insurance companies and other intermediaries. # Pension Fund Ombudsman: The Pension Fund Ombudsman is an independent grievance redressal mechanism for NPS and APY subscribers. It investigates and resolves complaints against pension fund managers and other intermediaries. # Foreign Exchange Dealers' Association of India (FEDAI): FEDAI sets rules and guidelines for foreign exchange transactions in India. It also acts as a self-regulatory organization for banks dealing in foreign exchange transactions. # Clearing Corporation of India Limited (CCIL): It is responsible for providing clearing and settlement services for foreign exchange and money market transactions. # Securities Appellate Tribunal (SAT): It is a quasi-judicial body that hears appeals against SEBI's decisions.

Foreign investment

Foreign investment in India is regulated by the

Foreign Exchange Management Act The Foreign Exchange Management Act, 1999 (FEMA), is an Act of the Parliament of India "to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly d ...

(FEMA) and the regulations issued thereunder by the

(RBI). The

Indian government The Government of India (ISO 15919, ISO: ; often abbreviated as GoI), known as the Union Government or Central Government but often simply as the Centre, is the Government, national government of the Republic of India, a federal democracy lo ...

has liberalized its foreign investment policies over the years, making it easier for

foreign investors Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance, the purpose of investing is ...

to invest in India.

Foreign Direct Investment A foreign direct investment (FDI) is an investment in the form of a controlling ownership in a business in one country by an entity based in another country. It is thus distinguished from a foreign portfolio investment by a notion of direct co ...

(FDI) is allowed in most sectors under the automatic route, which means that foreign investors do not require prior approval from the

or the RBI for their investment. However, certain sectors such as

defense Defense or defence may refer to: Tactical, martial, and political acts or groups * Defense (military), forces primarily intended for warfare * Civil defense, the organizing of civilians to deal with emergencies or enemy attacks * Defense industr ...

, telecom, and media require prior approval from the government.

Foreign Portfolio Investment A foreign portfolio investment is a grouping of assets such as stocks, bonds, and cash equivalents. Portfolio investments are held directly by an investor or managed by financial professionals. In economics, foreign portfolio investment is the entr ...

(FPI) is another avenue for foreign investors to invest in India. FPI refers to investments by

non-resident Indians Overseas Indians (IAST: ), officially Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) are Indians who live outside of the Republic of India. According to the Government of India, ''Non-Resident Indians'' are citizens of Indi ...

(NRIs),

foreign institutional investors An institutional investor is an entity which pools money to purchase securities, real property, and other investment assets or originate loans. Institutional investors include commercial banks, central banks, credit unions, government-linked c ...

(FIIs), and qualified foreign investors (QFIs) in securities listed on Indian stock exchanges. FPI is subject to certain limits and conditions prescribed by the

(SEBI). Foreign investment in certain sectors is subject to sector-specific caps on foreign ownership, which vary depending on the sector. For example, in the insurance sector, foreign ownership is capped at 49%, while in the defense sector, it is capped at 74%. The Indian government has also established the

Foreign Investment Promotion Board The Foreign Investment Promotion Board (FIPB) was a national agency of Government of India, with the remit to consider and recommend foreign direct investment (FDI) which does not come under the automatic route. India attract net inward foreign d ...

(FIPB), which is responsible for reviewing and approving foreign investment proposals that do not fall under the automatic route. However, the FIPB has been abolished and the government has streamlined the approval process for foreign investment proposals.

Anti-money laundering

has implemented several measures to prevent

money laundering Money laundering is the process of concealing the origin of money, obtained from illicit activities such as drug trafficking, corruption, embezzlement or gambling, by converting it into a legitimate source. It is a crime in many jurisdictions ...

and

terrorist financing Terrorism financing is the provision of funds or providing financial support to individual terrorists or non-state actors. Most countries have implemented measures to counter terrorism financing (CTF) often as part of their money laundering l ...

, including the

Prevention of Money Laundering Act Prevention of Money Laundering Act, 2002 is an Act of the Parliament of India enacted by the NDA government to prevent money-laundering and to provide for confiscation of property derived from money-laundering. PMLA and the Rules notified th ...

(PMLA) of 2002. The PMLA is the primary legislation for combating

in India and is administered by the

Financial Intelligence Unit Financial intelligence (FININT) is the gathering of information about the financial affairs of entities of interest, to understand their nature and capabilities, and predict their intentions. Generally the term applies in the context of law enfo ...

(FIU) of the

Ministry of Finance A ministry of finance is a part of the government in most countries that is responsible for matters related to the finance. Lists of current ministries of finance Named "Ministry" * Ministry of Finance (Afghanistan) * Ministry of Finance and Eco ...

. Under the PMLA,

s, including

insurance companies Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...

, and securities firms, are required to conduct due diligence on their customers, monitor their transactions, and report any suspicious transactions to the FIU. The Act also provides for the freezing and seizure of assets suspected to be the proceeds of crime.The act also sets up a specialized agency, the

Enforcement Directorate The Directorate of Enforcement (ED) is a law enforcement agency and economic intelligence agency responsible for enforcing economic laws and fighting economic crime in India. It is part of the Department of Revenue, Ministry of Finance, Gover ...

(ED), to investigate and prosecute money laundering cases. In addition to the PMLA, India has also implemented other measures to combat money laundering, including the

(FEMA) and the Income Tax Act. The

(RBI) and the

(SEBI) have also issued guidelines to their regulated entities for compliance with

anti-money laundering Money laundering is the process of concealing the origin of money, obtained from illicit activities such as drug trafficking, corruption, embezzlement or gambling, by converting it into a legitimate source. It is a crime in many jurisdictions ...

regulations. India is also a member of the

Financial Action Task Force The Financial Action Task Force (on Money Laundering) (FATF), also known by its French name, ''Groupe d'action financière'' (GAFI), is an intergovernmental organisation founded in 1989 on the initiative of the G7 to develop policies to combat m ...

(FATF), an intergovernmental organization that sets standards and promotes effective implementation of legal, regulatory, and operational measures for combating money laundering, terrorist financing, and other related threats to the integrity of the international financial system. India is subject to regular reviews by the FATF to ensure compliance with its standards. In addition to the PMLA, India has implemented several other financial regulations to combat money laundering. These regulations include: #

Know Your Customer Know Your Customer (KYC) guidelines in financial services require that professionals make an effort to verify the identity, suitability, and risks involved with maintaining a business relationship. The procedures fit within the broader scope of a ...

(KYC) norms: KYC norms require banks and financial institutions to verify the identity of their customers before providing any financial services. KYC norms involve obtaining and verifying personal information and documents, such as Aadhaar card,

PAN card A permanent account number (PAN) is a ten-character alphanumeric identifier, issued in the form of a laminated "PAN card", by the Indian Income Tax Department, to any "person" who applies for it or to whom the department allots the number wit ...

passport A passport is an official travel document issued by a government that contains a person's identity. A person with a passport can travel to and from foreign countries more easily and access consular assistance. A passport certifies the personal ...

, and

driver's license A driver's license is a legal authorization, or the official document confirming such an authorization, for a specific individual to operate one or more types of motorized vehicles—such as motorcycles, cars, trucks, or buses—on a public ...

. KYC norms help to prevent the use of fake or forged documents in financial transactions. # Suspicious Transaction Reporting (STR): STR requires banks and financial institutions to report any suspicious transactions to the

(FIU) of India. Such transactions could include those that are unusual or inconsistent with the customer's known sources of income. Banks and financial institutions are also required to maintain records of these transactions. #

Foreign Account Tax Compliance Act The Foreign Account Tax Compliance Act (FATCA) is a 2010 United States federal law requiring all non-U.S. foreign financial institutions (FFIs) to search their records for customers with indicia of a connection to the U.S., including indication ...

(FATCA): FATCA is a US law that requires foreign financial institutions to report information about US taxpayers to the US

Internal Revenue Service The Internal Revenue Service (IRS) is the revenue service for the United States federal government, which is responsible for collecting U.S. federal taxes and administering the Internal Revenue Code, the main body of the federal statutory ta ...

(IRS).India has signed an agreement with the United States to implement FATCA. Under this agreement, Indian financial institutions are required to report information about their American clients to the Indian government, which will then be shared with the US government. #

Common Reporting Standard The Common Reporting Standard (CRS) is an information standard for the Automatic Exchange Of Information (AEOI) regarding financial accounts on a global level, between tax authorities, which the Organisation for Economic Co-operation and Develo ...

(CRS): India has also signed the CRS agreement with other countries to exchange information on financial accounts held by foreign residents. #

Anti-Money Laundering Money laundering is the process of concealing the origin of money, obtained from illicit activities such as drug trafficking, corruption, embezzlement or gambling, by converting it into a legitimate source. It is a crime in many jurisdictions ...

(AML) guidelines: The

(RBI) has issued AML guidelines for banks and financial institutions to follow while conducting financial transactions. These guidelines include measures such as customer due diligence, record keeping, and risk management. #

(PMLA): The PMLA defines money laundering as an act of disguising the proceeds of a crime as legitimate funds. It also sets out the penalties for those found guilty of money laundering, which can include imprisonment and fines. The act applies to all individuals and entities, including banks, financial institutions, and money changers.

Banking regulation

Banking regulation Bank regulation is a form of government regulation which subjects banks to certain requirements, restrictions and guidelines, designed to create market transparency between banking institutions and the individuals and corporations with whom they ...

in India is overseen by the

(RBI), which is the

of the country. The RBI was established in 1935 and is responsible for regulating and supervising banks and other financial institutions in India. The RBI's primary objective is to maintain the stability of the Indian financial system, which it achieves through various regulatory measures. Some of the key

s enforced by the RBI include: *

Capital Adequacy Ratio Capital Adequacy Ratio (CAR) is also known as ''Capital to Risk (Weighted) Assets Ratio'' (CRAR), is the ratio of a bank's capital to its risk. National regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss and co ...

(CAR): The Reserve Bank of India (RBI) has prescribed a minimum CAR that

s in India must maintain to ensure that they have sufficient capital to absorb unexpected losses. * Asset Quality Review (AQR): The RBI conducts regular AQRs of banks to ensure that they are accurately reflecting the quality of their assets and that they are adequately provisioned for any losses. * Prudential Norms: The RBI has prescribed various prudential norms for banks, including limits on exposure to individual borrowers, classification of assets, and provisioning requirements. * Liquidity Requirements: Banks in India are required to maintain a certain level of

liquidity Liquidity is a concept in economics involving the convertibility of assets and obligations. It can include: * Market liquidity, the ease with which an asset can be sold * Accounting liquidity, the ability to meet cash obligations when due * Liqui ...

to ensure that they can meet their obligations as they fall due. The RBI has prescribed the minimum liquidity ratio (SLR) and the minimum net stable funding ratio (NSFR) for banks in India. * Prudential Norms: The RBI has prescribed various prudential norms for banks, including limits on exposure to individual borrowers, classification of assets, and provisioning requirements. These norms are designed to ensure that banks are operating prudently and managing risks effectively. *

Corporate Governance Corporate governance is defined, described or delineated in diverse ways, depending on the writer's purpose. Writers focused on a disciplinary interest or context (such as accounting, finance, law, or management) often adopt narrow definitions th ...

: The RBI has issued guidelines on corporate governance for banks in India, which require banks to have a strong board of directors, robust risk management processes, and effective internal controls. *

(AML) and Know Your Customer (KYC) norms: The RBI has put in place strict guidelines on AML and KYC to prevent money laundering and the financing of terrorism. Banks are required to carry out due diligence on their customers, monitor transactions, and report suspicious transactions to the relevant authorities. *

(KYC) and Anti-Money Laundering (AML): Banks are required to comply with KYC and AML guidelines to prevent money laundering and the financing of terrorism.

Banking regulation acts

There are several banking regulation acts in India that govern the functioning of banks and other financial institutions in the country. Some of the key acts are: *

: This is the primary legislation governing the functions and powers of the Reserve Bank of India (RBI), which is the central bank of India. The act provides for the regulation of banking and credit in India and gives the RBI the authority to issue licenses to banks and regulate their activities. *

: This act provides for the regulation and supervision of banking companies in India. It sets out the rules for the establishment and operation of banks, their capital requirements, and the powers of the RBI to inspect and supervise their activities. The act also provides for the appointment of the Banking Ombudsman, who is responsible for resolving complaints against banks. *

: This act governs the use and transfer of negotiable instruments such as cheques, promissory notes, and bills of exchange. It provides for the rights and obligations of parties to these instruments and sets out the rules for their payment and discharge. *

: This act provides for the regulation of securities markets in India and the protection of the interests of investors in these markets. It gives the Securities and Exchange Board of India (SEBI) the power to regulate and supervise the activities of stock exchanges, brokers, and other market intermediaries. *

: This act provides for the prevention of money laundering and the financing of terrorism in India. It requires banks and other financial institutions to carry out customer due diligence and maintain records of transactions to prevent the use of the financial system for illegal activities.

Securities market regulation

Securities market Security market is a component of the wider financial market where securities can be bought and sold between subjects of the economy, on the basis of demand and supply. Security markets encompasses stock markets, bond markets and derivatives mar ...

regulation in

is primarily overseen by the

(SEBI), which is responsible for regulating the securities markets in the country. SEBI has issued various

s and

guideline A guideline is a statement by which to determine a course of action. A guideline aims to streamline particular processes according to a set routine or sound practice. Guidelines may be issued by and used by any organization (governmental or pri ...

s to ensure that the securities markets operate in a fair, transparent, and efficient manner. Here are some key aspects of securities market regulation in India: *

Investor Protection An investor is a person who allocates financial capital with the expectation of a future return (profit) or to gain an advantage (interest). Through this allocated capital most of the time the investor purchases some species of property. Type ...

: SEBI's primary objective is to protect the interests of investors in the securities markets. It has issued various regulations to ensure that investors have access to accurate and timely information about securities, and that they are protected from fraudulent and unfair practices. For example, SEBI has issued regulations on

insider trading Insider trading is the trading of a public company's stock or other securities (such as bonds or stock options) based on material, nonpublic information about the company. In various countries, some kinds of trading based on insider information ...

market manipulation In economics and finance, market manipulation is a type of market abuse where there is a deliberate attempt to interfere with the free and fair operation of the market; the most blatant of cases involve creating false or misleading appearances ...

, and

disclosure requirement Sufficiency of disclosure or enablement is a patent law requirement that a patent application disclose a claimed invention in sufficient detail so that the person skilled in the art could carry out that claimed invention. The requirement is fu ...

s for

listed companies A public company is a company whose ownership is organized via shares of stock which are intended to be freely traded on a stock exchange or in over-the-counter markets. A public (publicly traded) company can be listed on a stock exchange (l ...

. * Market Operations: SEBI regulates the operations of the securities markets in India, including

s, and other market intermediaries. It has issued regulations on the conduct of brokers and intermediaries, including rules on capital adequacy, registration requirements, and compliance standards. * Listing Requirements: SEBI has issued regulations on listing requirements for companies that wish to list their securities on Indian stock exchanges. These regulations prescribe disclosure requirements, eligibility criteria, and other conditions that must be met by companies seeking to list their securities. * Disclosure Requirements: SEBI has issued regulations on disclosure requirements for listed companies, which prescribe the information that must be disclosed by companies to investors and the public. These regulations cover areas such as

financial statement Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form which is easy to un ...

management discussion and analysis Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form which is easy to un ...

, and related party transactions. * Investor Education: SEBI is also responsible for investor education and awareness programs, aimed at educating investors about the securities markets and the risks and opportunities associated with investing in securities. * Enforcement: SEBI has the power to investigate and take enforcement action against violations of securities laws and regulations. It can impose fines and other penalties on market participants who violate regulations, and can take legal action against offenders.

Securities markets regulation acts

The

in India are regulated by several acts,

rules Rule or ruling may refer to: Education * Royal University of Law and Economics (RULE), a university in Cambodia Human activity * The exercise of political or personal control by someone with authority or power * Business rule, a rule perta ...

, and

s. Here are some of the key securities market acts in India: *

: This is the primary legislation governing the securities markets in India. It established the

(SEBI) as the regulator for the

and gave it powers to regulate and develop the securities markets, protect the interests of investors, and promote investor education. *

Securities Contracts (Regulation) Act, 1956 The Securities Contracts (Regulation) Act, 1956 also known as SCRA is an Act of the Parliament of India enacted to prevent undesirable exchanges in securities and to control the working of stock exchange in India. It came into force on 20 Febru ...

: This act regulates the trading of securities in India and governs the functioning of

s, and other intermediaries in the securities markets. It defines the types of securities that can be traded in India, sets out the rules for the conduct of trading, and provides for the regulation and registration of stock exchanges and other market intermediaries. * Depositories Act, 1996: This act provides for the establishment of depositories in India and governs the transfer and registration of securities in electronic form. It enables investors to hold securities in dematerialized form and facilitates faster and more efficient settlement of trades. * Securities Contracts (Regulation) Rules, 1957: These are the rules made under the

, and provide for the regulation of stock exchanges, brokers, and other intermediaries in the securities markets. The rules cover areas such as eligibility criteria for listing on stock exchanges, margin requirements, and the conduct of brokers and intermediaries. * SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: These regulations prescribe the listing requirements for companies that wish to list their securities on Indian stock exchanges. They set out the eligibility criteria,

s, and other conditions that must be met by companies seeking to list their securities. * SEBI (Prohibition of Insider Trading) Regulations, 2015: These regulations prohibit insider trading in securities and prescribe the rules for the prevention of insider trading. They require companies to maintain a list of insiders and to disclose certain information to the stock exchanges and the public. * SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011: These regulations govern the acquisition of shares and takeovers of listed companies in India. They require acquirers to make certain disclosures and offer an open offer to minority shareholders in case of a change in control of a listed company.

Bullion regulation

Bullion regulation in

is overseen by the government and various regulatory bodies.

Bullion Bullion is non-ferrous metal that has been refined to a high standard of elemental purity. The term is ordinarily applied to bulk metal used in the production of coins and especially to precious metals such as gold and silver. It comes from t ...

refers to

precious metal Precious metals are rare, naturally occurring metallic chemical elements of high economic value. Chemically, the precious metals tend to be less reactive than most elements (see noble metal). They are usually ductile and have a high lustre. ...

s such as

gold Gold is a chemical element with the symbol Au (from la, aurum) and atomic number 79. This makes it one of the higher atomic number elements that occur naturally. It is a bright, slightly orange-yellow, dense, soft, malleable, and ductile met ...

and

silver Silver is a chemical element with the Symbol (chemistry), symbol Ag (from the Latin ', derived from the Proto-Indo-European wikt:Reconstruction:Proto-Indo-European/h₂erǵ-, ''h₂erǵ'': "shiny" or "white") and atomic number 47. A soft, whi ...

, which are often used as a store of value and a hedge against inflation. Here are some key aspects of bullion regulation in India: *

Import An import is the receiving country in an export from the sending country. Importation and exportation are the defining financial transactions of international trade. In international trade, the importation and exportation of goods are limited ...

and

Export An export in international trade is a good produced in one country that is sold into another country or a service provided in one country for a national or resident of another country. The seller of such goods or the service provider is an ...

: The import and export of

bullion Bullion is non-ferrous metal that has been refined to a high standard of elemental purity. The term is ordinarily applied to bulk metal used in the production of coins and especially to precious metals such as gold and silver. It comes from t ...

in India is regulated by the

Directorate General of Foreign Trade Directorate may refer to: Contemporary *Directorates of the Scottish Government * Directorate-General, a type of specialised administrative body in the European Union * Directorate-General for External Security, the French external intelligence ag ...

(DGFT) under the

Ministry of Commerce and Industry A Ministry of Trade and Industry, Ministry of Commerce, Ministry of Commerce and Industry or variations is a ministry that is concerned with a nation's trade, industry and commerce. Notable examples are: List *Algeria: Ministry of Industry and M ...

. Importers and exporters of bullion must obtain relevant licenses and comply with various regulations and guidelines issued by the government. *

Taxation A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal person, legal entity) by a governmental organization in order to fund government spending and various public expenditures (regiona ...

: Bullion is subject to various taxes in India, including

customs duty A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and polic ...

excise duty file:Lincoln Beer Stamp 1871.JPG, upright=1.2, 1871 U.S. Revenue stamp for 1/6 barrel of beer. Brewers would receive the stamp sheets, cut them into individual stamps, cancel them, and paste them over the Bunghole, bung of the beer barrel so when ...

, and

value-added tax A value-added tax (VAT), known in some countries as a goods and services tax (GST), is a type of tax that is assessed incrementally. It is levied on the price of a product or service at each stage of production, distribution, or sale to the end ...

(VAT). The government may also impose a tax on the sale or transfer of bullion, depending on the transaction size and other factors. * Hallmarking: The

Bureau of Indian Standards The Bureau of Indian Standards (BIS) is the National Standards Body of India under Department of Consumer affairs, Ministry of Consumer Affairs, Food & Public Distribution, Government of India. It is established by the Bureau of Indian Standar ...

(BIS) is responsible for hallmarking of gold and silver in India. Hallmarking is a process by which the purity and quality of bullion are verified and certified by an independent agency. Hallmarked bullion carries a BIS mark, which indicates the purity and quality of the metal. *

Trading Trade involves the transfer of goods and services from one person or entity to another, often in exchange for money. Economists refer to a system or network that allows trade as a market. An early form of trade, barter, saw the direct exchan ...

: Bullion trading in India is primarily conducted through

spot Spot or SPOT may refer to: Places * Spot, North Carolina, a community in the United States * The Spot, New South Wales, a locality in Sydney, Australia * South Pole Traverse, sometimes called the South Pole Overland Traverse People * Spot (produ ...

and

futures markets A futures exchange or futures market is a central financial exchange where people can trade standardized futures contracts defined by the exchange. Futures contracts are derivatives contracts to buy or sell specific quantities of a commodity or fi ...

.The India International Bullion Exchange (IIBX),

National Commodity and Derivatives Exchange National Commodity & Derivatives Exchange Limited (NCDEX) is an Indian online commodity and derivative exchange based in India. It is under the ownership of Ministry of Finance, Government of India. It has an independent board of directors an ...

(NCDEX) and

Multi Commodity Exchange Multi Commodity Exchange of India Ltd (MCX) ( BSE: 534091) is a India’s first recognised commodity exchange. MCX is regulated by Securities Exchange Board of India (SEBI), which is the securities market regulator in India since 28th September ...

(MCX) are the three major exchanges for trading in bullion futures contracts in India. These exchanges are regulated by the Securities and Exchange Board of India (SEBI) and International Financial Services Centres Authority(IFSCA). *

Investment Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance, the purpose of investing i ...

: Bullion is a popular investment option in India, and investors can purchase physical bullion or invest in bullion-based financial products such as

exchange-traded fund An exchange-traded fund (ETF) is a type of investment fund and exchange-traded product, i.e. they are traded on stock exchanges. ETFs are similar in many ways to mutual funds, except that ETFs are bought and sold from other owners throughout the ...

s (ETFs) or

mutual fund A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities. The term is typically used in the United States, Canada, and India, while similar structures across the globe include the SICAV i ...

s. The regulation of bullion-based financial products falls under the purview of the

(SEBI).

Bullion regulation acts

Bullion regulation in India is governed by various Acts and regulations. Here are some of the key Acts and regulations that are relevant to bullion regulation in India: * IFSC Authority (Bullion Exchange) Regulations, 2020: The act governs India International Bullion Exchange(IIBX) in

(IFSC). * Foreign Trade (Development and Regulation) Act, 1992: This Act regulates the import and export of goods in India, including bullion. The

(DGFT) under the

is responsible for issuing licenses for the import and export of bullion. * Bureau of Indian Standards Act, 2016: This Act empowers the

(BIS) to regulate the quality and standard of goods in India, including bullion. The BIS is responsible for hallmarking of gold and silver in India. * Central Excise Act, 1944: This Act levies excise duty on the manufacture and production of goods in India, including bullion. Excise duty is currently not applicable on gold and silver bullion in India. * Customs Act, 1962: This Act regulates the import and export of goods in India, including bullion. The Act specifies the procedures for clearance of imported and exported goods, including bullion. *

: This Act regulates the securities market in India, including the trading of bullion futures contracts on

commodity exchanges A commodities exchange is an exchange, or market, where various commodities are traded. Most commodity markets around the world trade in agricultural products and other raw materials (like wheat, barley, sugar, maize, cotton, cocoa, coffee, mi ...

. *

: This Act aims to prevent money laundering and terrorism financing in India, including in the bullion industry. Bullion dealers and traders are required to comply with various anti-money laundering (AML) and know-your-customer (KYC) regulations.

Financial services licenses

In India, financial services licenses are issued by the

(RBI) and the

(SEBI) depending on the type of financial activity being conducted.Here are some financial services licenses in India: #

Banking License A banking licence is a legal prerequisite for a financial institution that wants to carry on a banking business. Under the laws of most jurisdictions, a business is not permitted to carry words like a ''bank'', ''insurance'', ''national'' in th ...

: Banks in India are regulated by the

(RBI) under the

. The RBI is responsible for issuing banking licenses in India, and banks are classified into different categories based on their ownership, size, and type of operations. Scheduled banks are those that are included in the Second Schedule of the RBI Act and are eligible for certain privileges such as borrowing from the RBI. Non-scheduled banks are those that are not included in the Second Schedule of the RBI Act. Public sector banks are those that are owned by the

government of India The Government of India (ISO: ; often abbreviated as GoI), known as the Union Government or Central Government but often simply as the Centre, is the national government of the Republic of India, a federal democracy located in South Asia, c ...

, while private sector banks are those that are owned by private individuals or entities. Foreign banks are those that have a presence in India but are headquartered outside the country. Cooperative banks are those that are owned and operated by cooperatives. #

Non-Banking Financial Company A non-banking financial institution (NBFI) or non-bank financial company (NBFC) is a financial institution that does not have a full banking license or is not supervised by a national or international banking regulatory agency. NBFC facilitate ba ...

(NBFC) License: NBFCs are financial institutions that provide various financial services such as lending, investment, and deposit-taking, but are not licensed to accept demand deposits. The RBI is responsible for issuing NBFC licenses in India, and NBFCs are classified into different categories based on their activities. Systemically Important NBFCs (SI-NBFCs) are those that have a balance sheet size of over Rs. 500 crore or accept public funds, while Non-Systemically Important NBFCs (NSI-NBFCs) are those that do not meet these criteria. # Insurance License: The

Insurance Regulatory and Development Authority of India The Insurance Regulatory and Development Authority of India (IRDAI) is a regulatory body under the jurisdiction of Ministry of Finance , Government of India and is tasked with regulating and licensing the insurance and re-insurance industrie ...

(IRDAI) is responsible for issuing licenses for insurance companies in India.

Insurance companies Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...

can operate in different categories such as life insurance, general insurance, and health insurance. Life insurance companies offer various types of life insurance policies such as term insurance,

endowment policies An endowment policy is a life insurance contract designed to pay a lump sum after a specific term (on its 'maturity') or on death. Typical maturities are ten, fifteen or twenty years up to a certain age limit. Some policies also pay out in the ...

, and

unit-linked insurance plan A unit-linked insurance plan is a product offered by insurance companies that, unlike a pure insurance policy, gives investors both insurance and investment under a single integrated plan. History The first unit-linked insurance plan was launched ...

s (ULIPs). General insurance companies offer various types of non-life insurance policies such as motor insurance, home insurance, and travel insurance. Health insurance companies offer various types of health insurance policies such as individual health insurance, family floater health insurance, and critical illness insurance. # Mutual Fund License:

is responsible for regulating mutual funds in India and issuing licenses to mutual fund companies. Mutual fund companies are allowed to operate different types of funds such as

equity funds A stock fund, or equity fund, is a fund that invests in stocks, also called equity securities. Stock funds can be contrasted with bond funds and money funds. Fund assets are typically mainly in stock, with some amount of cash, which is generall ...

, debt funds, and hybrid funds. Equity funds invest primarily in stocks, debt funds invest primarily in bonds, while hybrid funds invest in a combination of stocks and bonds. # Stock Broker License:

also issues licenses to

stock brokers A stockbroker is a regulated broker, broker-dealer, or registered investment adviser (in the United States) who may provide financial advisory and investment management services and execute transactions such as the purchase or sale of stocks and ...

in India. Stock brokers are intermediaries that facilitate buying and selling of securities on behalf of clients on stock exchanges in India. Stock brokers can operate in different categories such as full-service brokers and discount brokers. # Depository Participant License: SEBI also issues licenses to depository participants in India.

Depository participant In India, a Depository Participant (DP) is described as an Agent of the depository. They are the intermediaries between the depository and the investors. The relationship between the DPs and the depository is governed by an agreement made between t ...

s are intermediaries that offer services related to holding and trading of securities in electronic form through a depository system. Depository participants can operate in different categories such as NSDL and CDSL.

Sources

The information for the above points was gathered from various sources, including: *

Official website
*

Government of India The Government of India (ISO: ; often abbreviated as GoI), known as the Union Government or Central Government but often simply as the Centre, is the national government of the Republic of India, a federal democracy located in South Asia, c ...

Official website
*

National Stock Exchange of India National Stock Exchange of India Limited (NSE) is the leading stock exchange under the ownership of various group of domestic and global financial institutions, public and privately owned entities and individuals. It is located in Mumbai, Mah ...

Official website
* International Financial Services Centre Authority
Official website

Journals and Further reading

* Journal of Banking Regulation
link
* Indian Journal of Finance
link
* Finance India
link
* Economic and Political Weekly
link
* Financial sector regulation in India
Link
* The status of financial inclusion, regulation, and education in India
link
* Financial Regulation in India by Jayant Verma and Sumit Agarwal * Financial Regulation: Changing Dynamics by Rajesh Chakrabarti and T.T. Ram Mohan * Financial Markets and Institutions in India by T.R. Bhat * Banking Regulation in India by M. L. Tannan * Indian Financial System by Bharati V. Pathak

References

Notes

External links

{{Authority control Regulation in India Executive branch of the government of India Regulatory agencies of India Organisations based in India

Government agencies of India Economic history of India (1947–present)