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RBI not for super-regulator in financial sector

Reserve Bank of India Governor Bimal Jalan on Monday told the Joint Parliamentary Committee probing the stock scam that he was not in favour of a 'super regulator' as the jurisdiction of various regulatory bodies differs vastly from each other.

"The RBI governor was of the opinion that the idea of a lead regulator or a super regulator was not a good one and there could be a different lead regulator for stock market and banking activity", JPC chairman Prakash Mani Tripathi told reporters after the meeting.

"The RBI's job is to look at the problem of economic activity but (undertaking) regulations is quite a lot of strain", he said, adding the RBI should be kept away from the job of policing.

Jalan was of the opinion that the problem of time lag between the settlements in stock exchanges and the fund flow from banks would be over after the electronic transfer system is introduced in all centres by March 2003. Currently they are operational in 13 centres, he said.

The RBI governor said he was in favour of more stringent actions against the violators in the stock market.

"We have to look into the area of penalty and they should be made more deterrent", Jalan told the JPC, adding that more cases should be given criminal penalty.

The JPC members felt the regulations of co-operative bodies would be more effective after the clearance of the Multi-Co-operatives Society and the second amendment to the Companies Act in Parliament as both deal with co-operatives.

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