The Insurance Regulatory and Development Authority (IRDA) and the Securities and Exchange Board of India (Sebi) have come under severe criticism from the country's official auditor comptroller and auditor general (CAG) for not following due diligence in financial matters concerning their own institutions.
IRDA went beyond its mandate to set up treadmills and inverters at the residences of its members while paying for their club memberships, costing the organisation a whopping Rs 25.38 lakh during March 2004-June 2008, CAG said in its report tabled in Parliament on Friday.
The auditor said in March 2008 it was found that IRDA provided facilities such as payment of actuarial allowance at Rs 10,000 to Rs 65,000 per month, club membership, besides providing treadmills and inverters at the residences of the members. The facilities provided were in contravention of the rules, CAG said.
The auditor has asked the finance ministry to direct IRDA to withdraw the benefits and recover the amount spent. The regulator had, however, taken the plea that the inverters were provided due to frequent powercuts and treadmills were installed at the residences due to paucity of space in the office gymnasium.
Market regulator Sebi came in for criticism for awarding database preparation work worth Rs 11 crore to National Securities Depository Ltd (NSDL) without any bidding process or seeking comments from the stakeholders.
"Due to award of the MAPIN database work without competitive bidding and without waiting for the feedback from the market participants...Sebi incurred an unfruitful expenditure of Rs 11.54 crore," CAG report said.
In November 2003, Sebi had notified setting up of a central database of securities Market Participants and Investors Identification Numbers (MAPIN) for the registration of all market participants and investors through allotment of unique identification numbers (UIN).