Need to harmonise regulations across regulators to reduce compliance friction: DEA Secy

Mumbai, Nov 17 (PTI) The Department of Economic Affairs Secretary Anuradha Thakur on Monday said there is a need to harmonise regulations across multiple regulators looking after various aspects of the financial sector to reduce friction in compliance for investors.

"I think more steps need to be taken to simplify processes, progressively digitise processes for FPIs (foreign portfolio investors), streamline KYC for NRIs and also harmonise regulations across regulators so as to reduce compliance friction for investors," Thakur said.

The 1994-batch IAS officer from the Himachal Pradesh cadre who was recently appointed as the DEA secretary added that the government is already working on the same.

On the GIFT City reforms side, Thakur also said foreign investors view India's lone International Financial Services Centre as a "sandbox" for their play in the rest of the country.

"Our approach to GIFT City is to try and push a continued alignment with international market practices," she said, speaking at the CII Financing Summit here.

Thakur also mentioned that there can be a new arbitration centre in the offing.

The key functionary from the Ministry of Finance said the Indian economy is "first and stable", and has not been impacted severely by the US-imposed tariffs.

"The Indian financial sector is the most stable among all the emerging markets but we need to be aware that the financial landscape is changing very fast," she added.

For sustained growth of over 8 per cent, the country needs a lot more investments, and banks and capital markets assume a pivotal role in the same, she said.

Pointing out that more work needs to be done on the capital markets front, Thakur rued that the corporate bond market is dominated by the high-rated issuers and there is also a dearth of activity in the secondary market front.

There is a higher reliance among companies to rely on internal resources for funding requirements, she said, pointing out that an ongoing study has pegged a 10 percentage point growth on this parameter to 70 per cent between 2014 and 2024.

She said the trend of decreasing reliance on bank borrowings and institutional debt is more pronounced in the manufacturing sector, and added that we also need to recognise the impact of delayed payments to small units.

"I hope that the pass through of GST cuts will ignite the animal spirits in the financial sector," Thakur said. PTI AA TRB