There was also an institutional mechanism in the form of the High Level Coordination Committee on Financial Markets (HLCCFM) now replaced by the Financial Stability Development Council (FSDC) for coordination among financial sector regulators and with Government. Despite an extensive regulatory framework for NBFCs, many gaps still remain.
As pointed out in the FSR (June 2011), differences in regulations for NBFCs vis-a-vis banks and between NBFCs under the purview of different regulators add to the scope for regulatory arbitrage. There are gaps and weaknesses in the regulatory perimeter-wealth management activities, structured products, hedge funds, private equity funds etc., need to be addressed.