External Corporate Governance Mechanism

Juniad BhaiSyed ModassarNazarSyed Sharoz AliSyed Fahad AlamTariq aliTalha YushfTalha KarimTobin G Thomas

External Corporate Governance Mechanism

Formal legal and regulatory obligations are part of the external incentive structure designed to ensure that competing companies abide by common standards of fairness, transparency, accountability, and responsibility to protect shareholders, consumers, workers, the environment, and even competitors from abusive practices.

Regulators in India

The regulators for India’s finance industry are:•The Reserve bank of India (RBI) •Ministry of Finance / Income Tax Department. •Foreign Exchange Dealers Association of India (FEDAI) •Deposit Insurance and Credit Guarantee Corporation •Fixed Income Money Market and Derivatives Association of India (FIMMDA) •Clearing Corporation of India Ltd. (CCIL)

International regulators

• World Bank • WTO - World Trade Organization • BID - Banco Interamericano de Desarollo • BIS - Bank for International Settlements • COSRA - Council of Securities Regulators of the Americas • FASB - Financial Accounting Standards Board • FIABV - Federacion Ibero americana de Bolsas de Valores • FIBV - Federation Internationale des Bourses de Valeurs • ICI - Investment Company Institute • IFC - International Finance Corporation • Association of National Numbering Agenc • International Organization of Securities Commissions

The Reserve bank of India (RBI)

• Role - The principal function of the RBI is, "...to regulate the issue of bank notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage."

• Responsibility • Advantage • Disadvantage

Main functions as a regulator (RBI)

• Formulates, implements and monitors India’s monetary policy. • Prescribes broad parameters for the functioning of India’s banking

operations.• Manages the Foreign Exchange Management Act, 1999. • Acts as banker to the Government: performs merchant banking

function for the central and the state governments; also acts as their banker.

• Acts as banker to banks: maintains banking accounts of all scheduled banks.

• Coordinates and monitors bank activities through its various departments.

RBI departments and there functions

• Department of Banking Operations and Development: Responsible for prudential regulations relating to capital adequacy, income recognition, asset classification, provisioning for loan and other losses, investment valuation, accounting and disclosure standards, asset-liability management and risk management systems.

• Also responsible for licensing new banks, expansion of foreign and domestic banks, approval for setting up subsidiaries and undertaking new activities by commercial banks, and follow-up for rehabilitation of weak banks. This is the most important department overseeing many of the activities of the Banks.

• Department of Banking Supervision: Off-site monitoring through introduction of a set of returns; strengthening the internal control systems in banks; increased use of external auditors in banking supervision.

• Department of External Investments and Operations: Managing the exchange rate of the Indian rupee, and managing and investing the foreign-exchange reserves of the RBI.

• Department of Payment and Settlement Systems: Regulating and overseeing payment and settlement systems, including those managed by the Reserve Bank and other commercial banks.

• Foreign Exchange Department: Facilitating external trade and payment, and developing and maintaining India’s foreign-exchange market.

Ministry of Finance / Income Tax Department

• The Ministry of Finance and Income Tax Department deal with matters involving government revenue and its collection and remittance to the Government. They also scrutinise high-value dealings as part of anti-money-laundering measures.

• Indian banks are provided with software for the collection and remittance of government revenue. Foreign banks are required to submit returns relating to anti-money-laundering, such as statement of high value receipts.

Foreign Exchange Dealers Association of India (FEDAI)

• The FEDAI was set up in 1958 as a self-regulatory association of banks dealing in foreign exchange in India (typically called Authorised Dealers – ADs). It was incorporated under Section 25 of The Companies Act, 1956. Its major activities include regulating the inter-bank foreign exchange business, and liaising with the RBI for reforms and development of the forex market.

Deposit Insurance and Credit Guarantee Corporation

• The preamble of the Deposit Insurance and Credit Guarantee Corporation Act, 1961 states that it is an Act to establish a corporation for insuring deposits and guaranteeing credit facilities, and for other associated matters.

Fixed Income Money Market and Derivatives Association of India (FIMMDA)

• FIMMDA is an association of commercial banks, financial institutions and primary dealers. it was incorporated as a Company under section 25 of the Companies Act,1956 on June 3rd, 1998. FIMMDA is a voluntary market body for the bond, money and derivatives markets.

Clearing Corporation of India Ltd. (CCIL)

• CCIL was set up in April, 2001 to provide exclusive clearing and settlement for transactions in money, government securities and foreign exchange. The prime objective has been to improve the transaction settlement process, insulate the financial system from operational shocks, and to undertake other related activities that would help broaden and deepen India’s money, debt and forex markets.

Gate keepers in India

• Those who control and monetary the policy , investment , foreign currency, lack money , Leader scam (Madu korda) kushwaha scam , chara scam ,

Institutional Investors in India

• Who are investors , where are they invest , favorite investing area , how much they invest , for research , product development, man power , for retail sector, where the need for investing …

Corporate raiders in India

• Tatas , Birlas , Ambani brothers , Sahara, kotak mahindra , Azim premji,

• Who are the corporate raiders why they only , why not we , why not you ,

• Is there any need for specialists for a raiders

•THANK YOU