Which financial sector regulator in India has the luxury of having 7,450 square feet office in high rent city Mumbai for just six officials?
Well, the answer is the Insurance Regulatory and Development Authority of India (IRDAI) that runs on policyholders' money, a senior official, speaking on condition of anonymity, told IANS.
One can play 'catch me if you can' there, the official added.
"It is IRDAI's 'kala pani' (the Cellular Jail or the colonial-era prison in Andaman during the British rule - where inconvenient officials to the powers that be are transferred out of Hyderabad," the official said.
Sources told IANS, IRDAI had taken on lease an office space of 7,450 square feet in Churchgate, Nariman Point, Mumbai in 2014, got it renovated at a cost of more than Rs1 crore, and opened its Mumbai regional office (MRO) in October 2015.
Since 2015, at any point of time, not more than 10 officers have been posted in the MRO—a luxurious 740 sq ft per official.
According to IRDAI officials, those working in the Mumbai office are from the inspection department—officials who inspect the books of regulated entities.
Strangely, the IRDAI in 2014 signed an MoU (memorandum of understanding) for taking about 25,000-30,000 sq ft office space on long lease in Mumbai.
To the questions raised under the Right to Information (RTI) Act on this, the IRDAI had replied that no progress had happened after the MoU while declining to share the copy of the agreement.
Sources told IANS that the purpose of having an office in Mumbai was to have its inspection department there as a large number of insurers and intermediaries are located in the western region—Mumbai and Pune.
But strangely, the IRDAI did not shift the entire department to Mumbai but only a handful of officers were posted there - 'punishment posting for some officials', the IRDAI official alleged.
The official said several officials are flown from Hyderabad to Mumbai for onsite inspection and incur huge hotel, and travel bills.
"The IRDAI does not have any annual budget as it is flush with policyholders' money. Only those who are constricted for funds do chart out a budget," the IRDAI official added.
After the COVID-19 pandemic, inspections are done remotely. The same can be continued and save on costs, the official added.
Be that as it may, for a long time, insurance industry officials have been saying it is time to shift the IRDAI headquarters from Hyderabad to Delhi or to financial sector capital Mumbai where other major financial regulators—the Reserve Bank of India and the Securities and Exchange Board of India (SEBI) are headquartered.
None of the insurers are located in Hyderabad, while a large number of insurers are headquartered in Delhi, Mumbai, Chennai, Pune, Bengaluru, several industry officials told IANS.
Even the two industry lobby bodies - the General Insurance Council, and the Life Insurance Council—are based in Mumbai.
According to industry officials, IRDAI suffers the locational disadvantage in attracting multi-cultural financial sector talent that is available in abundance in cities like Mumbai, Delhi, and Chennai.
Owing to the political compulsions back in early 2000, the then Central government agreed to locate IRDAI in Hyderabad.
The government, sources say, can shift the operating office to Mumbai while keeping the registered office in Hyderabad as it had happened in the case of IDFC whose registered office is in Chennai while the corporate office is in Mumbai.
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