The World Bank, in its India Financial Sector Assessment (FSA) Report, has called for strengthening the powers and independence of financial regulators through legislative and institutional changes.

The report notes that under the Banking Regulation (BR) Act, IRDAI Act, and SEBI Act, the government retains control over senior management and the boards of regulators. It points out that the Ministry of Finance (MoF) acts as the appellate authority for the Reserve Bank of India (RBI) and has the power to overturn its supervisory decisions.

According to the report, this power was first exercised in 2019, when the MoF took up the appeal of an Urban Cooperative Bank (UCB) and overturned the RBI’s decision to revoke its license.

The World Bank staff recommended transferring the appellate autho

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