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CS Professional · Banking and Insurance - Laws and Practice · Regulatory Framework of Banks

An instrument is marketed by a financial firm as a hybrid product combining a life insurance policy with a securities component. The RBI and SEBI disagree on whether it falls within their jurisdiction. Under Section 45Y of the RBI Act, 1934, who may refer the difference to the Joint Committee?

The reference may be made by the RBI Governor or the Chairperson of IRDAI, SEBI or PFRDA. Section 45Y(3) gives this power only to those Members, not to the Finance Minister, the Secretaries or the issuer.

  1. AOnly the Union Finance Minister
  2. BAny Member of the Joint Committee who is the RBI Governor, or the IRDAI, SEBI or PFRDA headCorrect
  3. CThe issuer of the instrument
  4. DAny ex officio Member, including the Secretary, Department of Economic Affairs

Explanation

Section 45Y(3) allows a reference by any Member under clauses (b), (e), (f) or (g): the RBI Governor and the heads of IRDAI, SEBI and PFRDA. The Finance Minister, the two Secretaries and the issuer are not given this power, which rules out the other options.

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