3 min readApr 24, 2026 09:03 PM IST
India’s regulatory framework is increasingly weighed down by excessive detail, while falling short on effective enforcement, former SBI Chairperson Arundhati Bhattacharya said on Thursday.
Speaking on the tendency to bypass rules at a function here, Bhattacharya said that individuals and businesses often look for shortcuts, prompting regulators to respond with tighter controls.
“Regulators try to ensure there are no shortcuts, but in doing so, regulations become highly micro in nature,” she said, adding that such an approach ends up entangling both policymakers and businesses in complex compliance requirements.
“While we definitely seem to be over regulated, where we lack is in the execution of those regulations,” she said while releasing the report on ‘Regulatory governance’ published by the Centre for Regulatory Governance of the OP Jindal Global University.
Bhattacharya, now Chairperson and CEO of Salesforce, observed that while India appears overregulated, the real gap lies in execution. She pointed to the number of orders issued by the Securities and Exchange Board of India (SEBI) and how many are later overturned by the Securities Appellate Tribunal (SAT).
Explaining the divergence, she said SEBI operates through a quasi-judicial process based on existing regulations, whereas SAT follows a strictly judicial approach.
“What SEBI does is a quasi-judicial process. They go as per regulations, and they get these orders,” she said.
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“What SAT does is a pure judicial process, and in the judicial process, if it is not specifically mentioned in the regulation that this is not allowed, they will throw it out, meaning that they go by the letter of the law, not by the spirit of the law.”
“What should be done, as is done in many other countries, is that, whatever is the regulation, you try to make sure that the regulated entity has gone not only by the letter of the regulation, but also the spirit of the regulation,” Bhattacharya said.
She also flagged delays in resolving high-profile cases, citing the long-pending NSE co-location case.
“If it had been in the US, they would have done it all in a matter of four or five months. But we have gone around, and it’s almost 10 years, and they are still talking about settling it with a file initially,” she said.
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Bhattacharya concluded that India’s legislative framework is largely sound, but enforcement remains the weak link. “The fact of the matter is, what we lack is a proper ability to execute, not a proper ability to enact. The enactment of the regulation of the laws is all perfect. Where we fall down is in the execution… unless and until we improve there, it’s going to be very difficult, because regulation invariably will then have to address a lot of micro issues,” she said.
© The Indian Express Pvt Ltd
