Both regulation of financial markets and financial institutions
is necessary to prevent the exploitation of the investors and the
borrowers.
RBI needs to control the working of financial institutions in
order to make the funds available to the borrowers at an appropiate
rate.
SEBI needs to control the financial market and the
intermediaries in order to ensure that the investors get a minimum
rate of return on the amount invested by them because every
investor expects high return if he is ready to bear higher
risk.
Further both the financial market and financial institutions
are interlinked with each other, working of both in a balanced
manner can help the economy to grow at a large scale.