RBI, Irdai oppose banks'' insurers in commodity derivatives

Mumbai, May 4 (PTI) Securities and Exchange Board of India (Sebi) Chairman Tuhin Kanta Pandey on Monday said the banking and insurance watchdogs are not in favour of allowing entities regulated by them to invest in commodity derivatives.

"Banks and insurance companies -- the respective regulators (RBI, Irdai) are not very favourably inclined to allow the banks and the insurance companies to invest in commodity derivatives and they have some valid rationale for it," Pandey said during a fireside chat at IMC Capital Market Conference 2026 in Mumbai.

He added that pension regulator in India had also looked at allowing pension funds to invest in commodity derivatives, but did not disclose whether it had made a decision.

Pandey said that Sebi will soon issue an advisory to market intermediaries on emerging risks from Anthropic's Mythos and other artificial intelligence tools.


"We have engaged with all stakeholders in this and shortly we are going to issue an advisory in terms of how they should really be very alert on the vulnerabilities that may be there and doing a proactive role in trying to do that," Pandey said.

Further, he said India needs long-term capital and market-based finance. Investors need better choices. Market development and investor protection must therefore move together.

"Across all market segments, our effort has been to support growth while managing risk," he added.

Recently, we have brought in changes to our process to facilitate a time-bound launch of funds by the AIF industry consistent with adequate oversight. This approach is especially relevant for debt markets, where the next phase must focus on issuer diversity, liquidity, and wider investor participation, he added.

A deeper bond market will complement equities and support long-term financing for infrastructure and enterprise, Pandey said.