Regulating the regulators: Assessing regulation-making frameworks in India's financial sector

Indian financial regulators exercise significant quasi-legislative powers, but the processes governing how they make regulations remain fragmented. This paper evaluates the regulation-making frameworks adopted by six financial sector regulators - IRDAI, IBBI, IFSCA, PFRDA, SEBI, and RBI — against three principles of good regulationmaking: consultation, evidence-based regulation-making, and periodic review. It then assesses a randomly selected consultation paper issued by each regulator in 2025 against indicators derived from these principles and each regulator's own framework. We find that while all six regulators have adopted some form of instrument, these instruments vary considerably in legal form, substantive scope, and analytical ambition. Regulators operating under more demanding frameworks are more likely to clearly identify the regulatory problem in their consultation documents. However, this relationship is not linear: stronger frameworks do not consistently produce stronger performance on more analytically demanding requirements. No regulator - including those whose frameworks expressly require it - included a cost-benefit analysis in its consultation paper, and no regulator assessed available alternatives to direct regulation. Every regulator failed to comply with at least one of its own procedural requirements. The paper concludes with five reforms directed at legislative reform, mandatory regulatory impact assessment, expert committee structures, defined periodic review cycles, and the use of technology.