The government has asked capital markets regulator Sebi to seek inputs from shareholders while drafting norms and rework them if the proposals are perceived to be much too restrictive, finance minister Nirmala Sitharaman said on Thursday, seeking to allay industry concerns that “over-restrictive regulations” would kill innovation.
Speaking at the Digital Acceleration & Transformation Expo in Bengaluru, organised by Trescon, the minister also exhorted state-run banks to further improve efficiency in drawing depositors while remaining cognisant of their role in satiating the vast credit appetite of a fast-growing economy.
“Get deposits, give them (depositors) good interest rates, and then make good money out of it as well. But at the same time, be possibly conscious (of the fact that) India’s growth depends on banks lending comfortably to people who want to set up units and grow them,” Sitharaman asked the public-sector banks.
According to the Reserve Bank of India (RBI) data, non-food bank credit growth touched 15.3% in September, which is lower than the 16.9% a year before but well above the long-period trend.
As for striking a balance between regulation and innovation, Sitharaman said: “The government has been suggesting to Sebi that before they come up with any regulation that can be perceived as being restrictive, they should actually consult industry and stakeholders. Even at the draft stage, take their inputs and go back to the drawing board if there is anything else which has to be tweaked or redrawn, keeping these stakeholders’ interests in mind.”
“And I’m happy to say that Sebi has already started doing this,” the minister said.
Sitharaman acknowledged that “if regulators get very restrictive in their enthusiasm to keep the market fair and square, it can affect the growth potential of that sector or that industry and the economy as a whole”. However, by adopting this consultative approach, this fear can be effectively addressed, she added.
