Parliament today passed a bill providing for a mechanism to resolve disputes between financial regulators as an ad hoc arrangement.

The government is still working on a permanent body to settle the inter-regulator disputes such as the SEBI-IRDA turf war, Finance Minister Pranab Mukherjee said.

"It is not a knee-jerk reaction, it is ad hoc arrangement," he said in the Rajya Sabha replying to a debate on the Securities and Insurance Laws (Amendment and Validation) Bill, 2010.

The bill provides for a joint mechanism, headed by the Finance Minister, to resolve the disputes between different financial regulators.

However, before the dispute is placed before the joint mechanism, it would, like in the past, go to the high level coordination committee headed by RBI Governor, he said.

Mukherjee said the government had to issue an ordinance on June 18 providing for such a mechanism, in the wake of the turf war between stock market SEBI and insurance watchdog IRDA over the jurisdiction on the popular ULIP.

Allaying apprehensions on government interference in the autonomy of RBI and financial regulators, he said there was no such intention.

"What do you expect me to do, will I remain a mute spectator, if they (regulators) quarrel like petulant children? My concept of autonomy is not like that....It is not good for the economy," he said.

Mukherjee said with growing economy, there would be more regulators in different sectors and there could be possibilities of inter-regulator disputes.

For resolving such disputes, there should be a permanent mechanism. The government has already floated a discussion paper on the proposed Financial Stability Development Council (FSDC).

As the paper has been placed in the public domain, it is being debated whether the FSDC would have statutory powers or not.