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Indian Financial System Mahesh Kumar Sarva, Lovely Professional University

Notes Unit 14: Financial Regulations

CONTENTS
Objectives
Introduction

14.1 Regulatory Framework of Security Market
14.2 Securities and Exchange Board of India
14.2.1 Evolution and Objectives of SEBI

14.2.2 Tasks of the SEBI
14.2.3 Powers of SEBI
14.2.4 Administration of SEBI
14.2.5 Operations of SEBI – An Evaluation
14.3 Reserve Bank of India

14.3.1 Organisation and Management of RBI
14.3.2 Reserve Bank Objectives
14.3.3 Objectives of Credit Control

14.3.4 Instruments of Credit Control
14.4 Summary
14.5 Keywords
14.6 Review Questions
14.7 Further Readings

Objectives

After studying this unit, you should be able to:
 Learn the concept of financial regulations;

 Understand objectives and task of SEBI;
 Understand objectives and task of RBI;
 Understand objectives of credit control;
 Understand instruments of credit control.

Introduction

Markets depend upon credibility and fairness. A sound regulatory framework is expected to
provide transparency, maintain market integrity, fairness and ensure investor protection. There
is a school of thought which believes that markets are inherently efficient and over-regulation
leads to inefficiency in the market. This school of thought argues for minimal or no regulations.
However, it is seen that lack of adequate regulations can lead to manipulations and market
abuses, which endanger the integrity of the market and damages the confidence of the investors.

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