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More safeguards needed in capital mart: Tarapore

S S Tarapore, head of the three-member high level committee to probe into UTI, said on Wednesday that instead of blaming the regulator for the US-64 crisis it was imperative that the supervisory capabilities in the stock markets and mutual fund sector are strengthened.

"The country needed to strengthen supervisory capabilities in stock markets and mutual fund sector," Tarapore said, but declined to comment on the UTI issue.

Speaking at the seminar on World Bank report on finance for growth, he said, "it is important to foster an environment wherein the regulator is not shot for each infringement, while the violators walk away scot-free. It is essential to invert this environment if the Indian financial system is to become effective, efficient and vibrant."

In this context, he said the deposit insurance system in the country encouraged predatory behaviour, and added that the recent Madhavapura Bank episode reinforced the feeling that the Indian polity does not countenance any assault on the divine right of immortality which Indian banks believe they have been endowed with.

"Herein lies the fragility of the Indian banking system and the longer a fundamental revamping is delayed, higher the eventual cost,"

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