Summary of this article
Irdai plans a new regulatory framework to strengthen financial stability and resilience.
Focus on better coordination across banking, insurance, pensions, and investment sectors.
Data-sharing, stress-testing, and risk oversight to help prevent systemic contagion.
The move aims to enhance market confidence through robust supervision and regulation.
The Insurance Regulatory and Development Authority of India (Irdai) has urged regulators and the government to work in closer harmony to develop a shared system for assessing and managing risks that could threaten financial stability.
Irdai chairperson Debasish Panda said the structure of India’s financial system has changed dramatically over the past decade. With insurance, banking, and investment sectors increasingly intertwined, the country can no longer afford to look at each in isolation, he said. Panda stressed that risks often spill over from one segment to another, making it necessary for regulators to view the system as a whole rather than through separate lenses.
He pointed out that while India’s financial sector has grown stronger and more diverse, it has also become more vulnerable to contagion from global shocks, market volatility, and climate-linked disruptions. The answer, he said, lies in a single, comprehensive framework that can map interconnections, identify early warning signs, and ensure a coordinated response when stress emerges.
1 November 2025
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Towards A Common Regulatory Language
Panda noted that every financial regulator in the country, whether it oversees banking, insurance, pensions, or securities, works within its own mandate. Yet, the lines between these sectors are increasingly blurred. A unified approach, he said, would allow all agencies to speak the same regulatory language and share data in real time.
He suggested that coordinated stress testing, joint scenario planning, and transparent data-sharing mechanisms would make the system more responsive. The aim is not to dilute any regulator’s authority but to ensure that potential risks are spotted and addressed before they become systemic, he said, according to a report in PTI.
He added that such collaboration would help regulators detect hidden linkages and overlapping exposures that could otherwise go unnoticed. A stronger, more integrated approach would also give policymakers the clarity they need to act swiftly in periods of uncertainty, he added.
Preparing For Emerging Challenges
The Irdai chief observed that new forms of risk are emerging faster than ever before. Climate change, technology-driven disruptions, and the rise of digital finance are changing how risk is created and transmitted. Traditional oversight methods will need to be re-examined in light of these shifts, he further said.
Panda said the ultimate goal is to build a resilient financial ecosystem, one that protects consumers, maintains investor confidence, and can withstand shocks without destabilising the economy. He called on all financial agencies to see themselves as parts of a single network rather than separate institutions with narrow mandates.
Coordination between regulators and the government is not just desirable, it is essential for preserving trust and ensuring that India’s financial system remains steady in a rapidly changing world, he added.
