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Role of RBI and SEBI in Regulation and growth of Companies in India

Role of RBI and SEBI in regulation and growth of companies in India

in every country there is one organisation which works as the central bank. The function of the central bank of a country is to control and monitor the banking and financial system of the country in India the Reserve Bank of India RBI is the central bank.

The RBI was established in 1935. it was Nationalised in 1949. The RBI plays role of regulator of the banking system in India. The Banking Regulation Act 1949 and the RBI act 1953 has given the RBI has different roles below, we share and discuss some of the functions of the RBI.

RBI is the regulator of financial system

the RBI regulates the Indian banking and financial system by issuing broad guidelines and instructions. The objectives of these regulations includes:

Controlling money supply in the system

Monitoring different key indicators like GDP and inflation.

Maintaining people's confidence in the banking and financial system, and

Providing different tools for customers help such as acting as the “Banking Ombudsman”.

RBI is the issuer of monetary policy

The RBI formulates monetary policy twice a year it reviews the policy every quarter as well the main objectives of monitoring monetary policy are:

Inflation control

Control on bank credit

Interest rate control

The government has proposed to amend the Reserve Bank of India RBI act to take away money market regulatory powers from the central bank and bring it under the purview of the securities and exchange Board of India (SEBI). The proposal to shift the power to regulate money market operations from RBI was made by the financial sector legislative Reforms Commission. though there were exhaustive discussions on most other proposals by the Council, The proposal to shift money regulations from RBI wasn't discussed.

Securities and exchange Board of India (SEBI)

securities and exchange Board of India as RBI is an Apex body, which maintains and regulates our capital market. it was established in the year 1988 by the Indian government later in the year 1992, it received the statutory powers and the status of the fully autonomous body.

Restricts illegal practices- it forbids illegal and fraudulent practices of the firm which operate in the securities market.

Safeguard investor’s interest- it protects an investor’s interest in the capital market through guidance and proper education. so if you have any complaint about anything related to capital market.

Regulate working of exchanges- it regulates and keeps a check on the working of stock exchanges and other aspects of the securities market.

Monitor the workings of mutual funds- it monitors and regulates and working of mutual funds. it keeps a tight supervision on their business operations and protects investors from the unfair practices.

Regulate takeovers and acquisitions- They issue guidelines to regulate takeovers mergers and activations of firm to protect investors interest.

Prohibition of insider activity- it prohibits insider activity and also restricts the undesirable practice of brokers and others agents in the capital market.

SEBI has played a really important role in regulating the capital market and in the development of our overall economy.

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