Global Financial Regulation and India's Role
1: Introduction to Global Financial Regulation
- The topic of financial regulation is brought to light as nations around the globe try to establish standard rules in a bid to control financial activities within their jurisdictions.
- Emphasised recently due to different approaches taken by Dubai, EU and the U.S. towards financial regulation.
- Dubai's regulatory authority, VARA, operates under a distinctive licensing framework.
- The EU, on the other hand, centralises its regulatory efforts around market rules through the Markets in Crypto-Assets (MiCA).
- The U.S. has not yet developed a comprehensive framework, indicating the diverse ways in which nations are dealing with the challenges and opportunities presented by financial markets.
2: A Look at India's Role through the Organization
- A crucial entity formed by the Indian government in 2004, operating out of New Delhi, plays a noteworthy part in the financial regulatory framework of the country.
- This organisation works under the Department of Revenue, Government of India and its primary role is to gather financial intelligence on the crimes related to the Prevention of Money Laundering Act, 2002.
- The entity is a crucial component of India's efforts to counter money laundering and other financial crimes.
3: The Organisational Reporting Structure
- It operates as an independent body, bypassing several layers of bureaucracy to report directly to the Economic Intelligence Council (EIC).
- The EIC is led by the Finance Minister, stressing the significance of the organisation in the country's financial structure.
- This organisational structure ensures the timely and efficient handling of financial intelligence relating to crimes in the financial sector.
GK Part:
- Knowledge about the global financial regulatory frameworks and India's efforts in financial intelligence collection can be useful in various government exams.
- Questions pertaining to the Prevention of Money Laundering Act, 2002, the functioning and the reporting structure of the concerned organisation, and the role of EIC in India's finance infrastructure may be asked.
- Global comparison of financial regulatory frameworks (VARA in Dubai, MiCA in the EU, and the lack of a comprehensive framework in the U.S.) can also be an area of interest in these examinations.
- Candidates must keep up-to-date with India's financial regulatory measures and the latest global trends.
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