There used to be this famous dialogue in earlier Hindi movies where one of the protagonist challenged the other saying : “Ye ilaaka mera hai“(this turf is mine!). Or the hero telling the villain “apne ilaake mein sab sher hote hain” (everyone is a lion in his own turf).
We are seeing similar games being played here. Given how interconnected financial space is, one can see one regulator operating in the turf of the other. SEBI looks at stock exchanges and RBI looks at FDI in banks. Recently, RBI intervened to check foreign ownership breach in HDFC Bank.
This has led to SEBI saying “ye ilaaka mera hai” and objected to the intervention:
The Securities and Exchange Board of India has expressed displeasure over the Reserve Bank of India’s intervention in the trading of HDFC Bank shares after the overseas holding was breached on February 17. Sebi is said to have lodged a protest in a strongly worded letter to RBI.
“Market sanctity is important to Sebi. Even Sebi doesn’t intervene during market hours. RBI can’t do anything like this without consulting with Sebi,” said a regulatory official aware of the letter. ” This is backseat driving.” Sebi has said that to ensure such a situation doesn’t recur a solution needs to be worked out by both regulators.
This is nothing new though. Infact earlier SEBI was on the other side when it intervened on the ULIP case. IRDA then said “ye ilaka mera hai”..