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The Insurance Regulatory and Development Authority Of India (IRDAI) is a national agency of the Government of India, based in Hyderabad. It was formed by an act of Indian Parliament known as IRDA Act 1999, which was amended in 2002 to incorporate some emerging requirements. Mission of IRDA as stated in the act is "to protect the interests of the Policyholders, to regulate, promote and ensure orderly growth of the Insurance industry and for matters connected therewith or incidental thereto."
In 2010, the Government of India ruled that the Unit Linked Insurance Plans (ULIPs) will be governed by IRDA, and not the market regulator Securities and Exchange Board of India.

Duties, Powers and Functions of IRDAI

Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of IRDA:
  1. Subject to the provisions of this Act and any other law for the time being in force, the Authority shall have the duty to regulate, promote and ensure orderly growth of the insurance business and re-insurance business.
  2. Without prejudice to the generality of the provisions contained in sub-section (1), the powers and functions of the Authority shall include,
    1. Issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration;
    2. Protection of the interests of the policy holders in matters concerning assigning of policy, nomination by policy holders, insurable interest, settlement of Insurance claim, surrender value of policy and other terms and conditions of contracts of insurance;
    3. Specifying requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents;
    4. Specifying the code of conduct for surveyors and loss assessors;
    5. Promoting efficiency in the conduct of insurance business;
    6. Promoting and regulating professional organisations connected with the insurance and re-insurance business;
    7. Levying fees and other charges for carrying out the purposes of this Act;
    8. Calling for information from, undertaking inspection of, conducting enquiries and investigations including audit of the insurers, intermediaries, insurance intermediaries and other organisations connected with the insurance business;
    9. Control and regulation of the rates, advantages, terms and conditions that may be offered by insurers in respect of general insurance business not so controlled and regulated by the Tariff Advisory Committee under section 64U of the Insurance Act, 1938 (4 of 1938);
    10. Specifying the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by insurers and other insurance intermediaries;
    11. Regulating investment of funds by insurance companies;
    12. Regulating maintenance of margin of solvency;
    13. Adjudication of disputes between insurers and intermediaries or insurance intermediaries;
    14. Supervising the functioning of the Tariff Advisory Committee;
    15. Specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organisations referred to in clause (f);
    16. Specifying the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural or social sector; and
    17. Exercising such other powers as may be prescribed from time to time,

Pension Fund Regulatory and Development Authority (PFRDA)

Pension Fund Regulatory and Development Authority (PFRDA) is the prudential regulator for the NPS. PFRDA was established by the Government of India on 23 August 2003 to promote old age income security by establishing, developing and regulating pension funds. PFRDA has set up a Trust under the Indian Trusts Act, 1882 to oversee the functions of the PFMs. The NPS Trust is composed of members representing diverse fields and brings wide range of talent to the regulatory framework.

Forward Markets Commission (FMC)

The Forward Markets Commission (FMC) is the chief regulator of forwards and futures markets in India. As of March 2009, it regulated Rs 52 trillion worth of commodity trades in India. It is headquartered in Mumbai and unusually for a financial regulatory agency is overseen by the Ministry of Consumer Affairs, Food and Public Distribution (India). Mr. Ramesh Abhishek replaced Mr. B.C. Khatua as the chairman of the commission in 2011.


The broad categories of priority sector for all scheduled commercial banks are as under:
  1. Agriculture (Direct and Indirect finance): Direct finance to agriculture shall include short, medium and long term loans given for agriculture and allied activities directly to individual farmers, Self-Help Groups (SHGs) or Joint Liability Groups (JLGs) of individual farmers without limit and to others (such as corporates, partnership firms and institutions) up to Rs. 20 lakh, for taking up agriculture/allied activities.
    Indirect finance to agriculture shall include loans given for agriculture and allied activities.
  2. Small Scale Industries (Direct and Indirect Finance): Direct finance to small scale industries (SSI) shall include all loans given to SSI units which are engaged in manufacture, processing or preservation of goods and whose investment in plant and machinery (original cost) excluding land and building does not exceed the amounts specified. Indirect finance to SSI shall include finance to any person providing inputs to or marketing the output of artisans, village and cottage industries, handlooms and to cooperatives of producers in this sector.
  3. Small Business / Service Enterprises shall include small business, retail trade, professional & self employed persons, small road & water transport operators and other service enterprises as per the definition given in Section I and other enterprises that are engaged in providing or rendering of services, and whose investment in equipment does not exceed the amount specified in Section I, appended.
  4. Micro Credit : Provision of credit and other financial services and products of very small amounts not exceeding Rs. 50,000 per borrower to the poor in rural, semi-urban and urban areas, either directly or through a group mechanism, for enabling them to improve their living standards, will constitute micro credit.
  5. Education loans: Education loans include loans and advances granted to only individuals for educational purposes up to Rs. 10 lakh for studies in India and Rs. 20 lakh for studies abroad, and do not include those granted to institutions;
  6. Housing loans: Loans up to Rs. 15 lakh for construction of houses by individuals, (excluding loans granted by banks to their own employees) and loans given for repairs to the damaged houses of individuals up to Rs.1 lakh in rural and semi-urban areas and up to Rs.2 lakh in urban areas.
Total Priority Sector advances
  • 40% of Adjusted Net Bank Credit (ANBC) or credit equivalent amount of Off-Balance Sheet Exposure, whichever is higher.
  • 32% of ANBC or credit equivalent amount of Off-Balance Sheet Exposure, whichever is higher.

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