Is There a Case for a Super Regulator in India?

In recent years, some countries have set up 'super' regulators for the financial sector. In the Indian context as well, it has been suggested in some quarters that there is a need for a super regulator. As the underlying rationale for creation of a super regulator is to deal with the regulatory challenges emerging from the blurring or convergence of activities performed by providers of various financial services and the resultant overlaps, gaps, inconsistencies and uneven playing field in regulation, this paper systematically examines in detail whether and to what extent such elements are present in India. It is established that at present there are no significant regulatory overlaps/gaps, conflicts or inconsistencies. There is also no evidence of an uneven playing field amongst similar financial institutions. One significant development has been the emergence of financial conglomerates. However, their number is not very large. As such, the study argues that there is no case for a super regulator in India. Given the present institutional settings in India, the institution of a super regulator could have serious ramifications for the stability of the financial system. While there is no case for a super regulator in India, the need is felt to have in place a 'lead' regulator.