Financial regulators and development banks: IRDAI, PFRDA, NABARD, SIDBI
Four bodies beyond the and : two regulators (insurance, pensions) and two apex lenders (rural credit, small industry).
What the paper can ask
- IRDAI was constituted under the IRDA Act 1999 after the Malhotra Committee (report 1994) recommended opening insurance to private firms; the Authority has a chairperson plus up to five whole-time and four part-time members.
- PFRDA began as an interim body by government resolution on 23 August 2003 and became statutory under the PFRDA Act 2013, notified 1 February 2014.
- NABARD was set up on 12 July 1982 under the NABARD Act 1981, taking over the RBI's agricultural credit functions; it is fully owned by the Government of India and runs the Rural Infrastructure Development Fund.
- SIDBI was established on 2 April 1990 under the SIDBI Act 1989 as the principal financial institution for MSMEs; it was delinked from IDBI on 27 March 2000 and floated MUDRA.
Why exams ask
Setters ask where each body is based, the founding year and Act, the committee behind each body, and what each regulator supervises.
The full story
India's financial system is policed sector by sector. The RBI watches banks and SEBI the markets; the Insurance Regulatory and Development Authority of India (IRDAI) licenses and supervises insurers, and the Pension Fund Regulatory and Development Authority (PFRDA) is the regulator for pension funds.
In the news
Test yourself
1.The Insurance Regulatory and Development Authority of India (IRDAI) is headquartered in:
Correct. IRDAI, set up under the IRDA Act 1999, regulates insurance from Hyderabad; SEBI (securities) is in Mumbai and PFRDA (pensions) in Delhi.
Not quite. IRDAI, set up under the IRDA Act 1999, regulates insurance from Hyderabad; SEBI (securities) is in Mumbai and PFRDA (pensions) in Delhi. It goes into your error book.
2.The Pension Fund Regulatory and Development Authority (PFRDA) regulates:
Correct. PFRDA, statutory since 2013, regulates the National Pension System (NPS) and Atal Pension Yojana. EPF is run by the EPFO, mutual funds by SEBI.
Not quite. PFRDA, statutory since 2013, regulates the National Pension System (NPS) and Atal Pension Yojana. EPF is run by the EPFO, mutual funds by SEBI. It goes into your error book.
3.NABARD, the apex body for rural and agricultural credit, was established in 1982 on the recommendation of which committee?
Correct. NABARD was set up on 12 July 1982 on the recommendation of the B. Sivaraman Committee (CRAFICARD), taking over the RBI's agricultural credit functions.
Not quite. NABARD was set up on 12 July 1982 on the recommendation of the B. Sivaraman Committee (CRAFICARD), taking over the RBI's agricultural credit functions. It goes into your error book.