National Council of Applied Economic Research
An in-person full-day seminar was organised at NCAER on 7 September 2022 by NCAER and the Investor Education and Protection Fund Authority (IEPFA) on the Foundation Day of IEPFA. The aim of the seminar, held under the aegis of the Ministry of Corporate Affairs, Government of India, was to promote financial literacy, investor awareness, and protection. The seminar, was widely attended by the investor community, NCAER faculty, IEPFA staff, and students from the economics and business streams from various colleges, among others.
Dr Mridul Saggar, the IEPF Chair Professor at NCAER, in his presentation highlighted several dimensions of policies and practices that have a bearing on protecting investors’ interest and suggested the future agenda in this respect. He covered issues relating to corporate governance, digital assets, ESG investing, market integrity, intermediation costs, day trading and margin trading. He drew attention to the sharp fall in the saving and investment rates by 9.6 ppt and 12.5 ppt of GDP from their its peaks in recent years and said this was one of the important reasons why the Indian economy had slowed down in recent years with GVA growth averaging 5.0 percent during 20111-12 to 2020-21 compared with 8.5 percent during 2003-04 to 2010-11. He said maintaining macro-financial stability was of paramount importance in this context if we were to lift back saving and investment rates to earlier highs. He added that not just fiscal incentive and positive real rates were essential for this, but buffeting investor protection could go a long way in achieving this goal as both domestic and foreign investors were sensitive to such stability and governance quality. He also urged minority shareholders to exercise their rights and maintain vigilance over controlling shareholders.
Delivering the keynote address at the seminar the CEO, IEPFA, and Joint Secretary in the Ministry of Corporate Affairs, Smt Anita Shah Akella highlighted the imperative of educating investors and ensuring that all stakeholders were guaranteed possession of their rightful shares, dividends and debentures. She cautioned that even where influencers are used for messaging, investors must exercise their discretion.
The seminar concluded with a Panel Discussion on “Investor Protection in a Digital World,” focusing on the need for safeguarding investors in an environment of increasing digitisation of financial transactions. The panel comprised of eminent experts that included Mr Jayant Kumar Dash, Executive Director, RBI, Mr Girraj Prasad Garg, Executive Director, SEBI, Shri K.P.S. Malhotra, Deputy Commissioner of Police who heads the Intelligence Fusion and Strategic Operations (IFSO) which is the Cyber Crime Unit of Delhi Police, Dr. Mridul Saggar, Mr. Rakesh Jain, member IEPFA and Lt. Col. Tushar Anand, GM, IEPFA. Moderating the panel, Ms. Mythili Bhusnurmath, Consulting Editor, Economic Times and a Senior Advisor at NCAER expressed concern about rising digital frauds and the efficacy of policies in place for customer protection in this regard. The two regulator representatives explained ta length the recent initiatives taken in this regard and said that unless the deposit holders and investors themselves paid attention to protecting themselves by following the guidelines and not sharing their private information and timely information when hacked, it was very difficult to check the frauds. Dr. Saggar expressed concern that in absence of adequate legislative framework and timely enforcement mechanisms, regulation was falling through the cracks and called for global cooperation in this area. He suggested that India should take the lead in its G20 Presidency and push for stringent measures against crypto assets and so called ‘stablecoins’ which he said was a misnomer. DCP Mr. Malhotra discussed some live examples of cases and said that the police was in close coordination with RBI and NPCI in enhancing digital protection.
Earlier, Mr. M.R. Shri Kanth of RBI made a presentation on financial literacy and Mr. Sumit Aggarwal and Mr. Gaurav Gupta of IEPFA made a presentation on IEPFA initiatives on investor protection. They used attractive and live examples to educate the audience about possible frauds and diligence in making banking transactions, especially in the context of increasing digitization and on methods to reclaim their dividends and shares, respectively. Lt. Col. Mr. Sumit M. Rane, GM and Mr. Anil K. Sharma, Secretary, NCAER delivered vote of thanks.
The Investor Education and Protection Fund Authority (IEPFA) was set up on September 7, 2016, by the Government of India, for administering the Investor Education and Protection Fund for making refunds of shares, unclaimed dividends, and matured deposits/debentures, among other things, to investors.
The IEPF Chair has been established at NCAER in 2020 with the support of the IEPFA under the Ministry of Corporate Affairs, Government of India. Dr Saggar currently leads a group focused on research and policy outreach in the broad area of financial regulation and public policies, including concerns about investor education and protection and financial sector reforms aimed at deepening and widening financial markets.
