Financial Stability and Development Council (FSDC)

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8-May-2023: Union Finance Minister Smt. Nirmala Sitharaman chairs the 27th Meeting of the Financial Stability and Development Council (FSDC)

Union Finance and Corporate Affairs Minister Smt. Nirmala Sitharaman chaired the 27th Meeting of the Financial Stability and Development Council (FSDC) here today, for the first time after the announcement of the Budget 2023-24.

During the meeting of the Council, it was discussed that the policy and legislative reform measures required to further develop the financial sector may be formulated and implemented expeditiously to not only increase the financial access of the people, but also increase their overall economic well-being.

Union Finance Minister Smt. Sitharaman advised that:

  • Regulators should maintain a constant vigil as ensuring ‘financial sector stability is a shared responsibility’ of the regulators. Regulators must take appropriate and timely action to mitigate any vulnerability and strengthen financial stability.
  • Regulators should adopt a focused approach to reduce the compliance burden further and ensure a streamlined and efficient regulatory environment. The progress achieved in this regard shall be reviewed by the Union Finance Minister with each regulator in June 2023.
  • The regulators need to be proactive and ensure cyber-security preparedness of the information technology systems to reduce the risk of cyber-attacks, protect sensitive financial data, and maintain overall system integrity, thus safeguarding the stability and resilience of the Indian financial ecosystem.
  • Regulators should conduct a special drive to facilitate the settlement of unclaimed deposits and claims in the financial sector across all segments, such as banking deposits, shares and dividends, mutual funds, insurance, etc.
  • Action Taken Report on Budget announcements made since 2019 was discussed. A focused approach should be adopted by the regulators to implement the announcements made in the Budget 2023-24, for which timelines were also decided.

The Council, inter alia, also deliberated on Early Warning Indicators for the economy and our preparedness to deal with them, Reducing Compliance Burden on the regulated entities in the financial sector by Improving Regulatory Quality, Debt Levels of Corporates and Households in India, Simplification and Streamlining of KYC Framework to meet the needs of Digital India, Seamless Experience for Retail Investors in Government Securities, Bimakrit Bharat - Unique Value Proposition to take insurance to last mile, and support required in terms of resolving inter-regulatory issues for GIFT IFSC to play strategic role in Atmanirbhar Bharat.  The Council also took note of the activities undertaken by the FSDC Sub-Committee chaired by the RBI Governor and the action taken by members on the past decisions of the FSDC.

The meeting was attended by Union Ministers of State for Finance Shri Pankaj Chaudhary and Dr. Bhagwat Kishanrao Karad; Shri Shaktikanta Das, Governor, Reserve Bank of India; Dr. T. V. Somanathan, Finance Secretary and Secretary, Department of Expenditure, Ministry of Finance; Shri Ajay Seth, Secretary, Department of Economic Affairs, Ministry of Finance; Dr. Vivek Joshi, Secretary, Department of Financial Services, Ministry of Finance; Shri Sanjay Malhotra, Secretary, Department of Revenue,  Ministry of Finance;  Dr. Manoj Govil, Secretary, Ministry of Corporate Affairs; Dr. V. Anantha Nageswaran, Chief Economic Adviser, Ministry of Finance; Ms. Madhabi Puri Buch, Chairperson, Securities and Exchange Board of India; Shri Debasish Panda, Chairperson, Insurance Regulatory and Development Authority of India; Dr. Deepak Mohanty, Chairperson, Pension Fund Regulatory and Development Authority; Shri Ravi Mital, Chairperson, Insolvency and Bankruptcy Board of India; Shri Injeti Srinivas, Chairperson, International Financial Services Centres Authority; and the Secretary of the FSDC, Department of Economic Affairs, Ministry of Finance.

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8-May-2023: Union Finance Minister Smt. Nirmala Sitharaman chairs the 27th Meeting of the Financial Stability and Development Council (FSDC)

Union Finance and Corporate Affairs Minister Smt. Nirmala Sitharaman chaired the 27th Meeting of the Financial Stability and Development Council (FSDC) here today, for the first time after the announcement of the Budget 2023-24.

During the meeting of the Council, it was discussed that the policy and legislative reform measures required to further develop the financial sector may be formulated and implemented expeditiously to not only increase the financial access of the people, but also increase their overall economic well-being.

Union Finance Minister Smt. Sitharaman advised that:

  • Regulators should maintain a constant vigil as ensuring ‘financial sector stability is a shared responsibility’ of the regulators. Regulators must take appropriate and timely action to mitigate any vulnerability and strengthen financial stability.
  • Regulators should adopt a focused approach to reduce the compliance burden further and ensure a streamlined and efficient regulatory environment. The progress achieved in this regard shall be reviewed by the Union Finance Minister with each regulator in June 2023.
  • The regulators need to be proactive and ensure cyber-security preparedness of the information technology systems to reduce the risk of cyber-attacks, protect sensitive financial data, and maintain overall system integrity, thus safeguarding the stability and resilience of the Indian financial ecosystem.
  • Regulators should conduct a special drive to facilitate the settlement of unclaimed deposits and claims in the financial sector across all segments, such as banking deposits, shares and dividends, mutual funds, insurance, etc.
  • Action Taken Report on Budget announcements made since 2019 was discussed. A focused approach should be adopted by the regulators to implement the announcements made in the Budget 2023-24, for which timelines were also decided.

The Council, inter alia, also deliberated on Early Warning Indicators for the economy and our preparedness to deal with them, Reducing Compliance Burden on the regulated entities in the financial sector by Improving Regulatory Quality, Debt Levels of Corporates and Households in India, Simplification and Streamlining of KYC Framework to meet the needs of Digital India, Seamless Experience for Retail Investors in Government Securities, Bimakrit Bharat - Unique Value Proposition to take insurance to last mile, and support required in terms of resolving inter-regulatory issues for GIFT IFSC to play strategic role in Atmanirbhar Bharat.  The Council also took note of the activities undertaken by the FSDC Sub-Committee chaired by the RBI Governor and the action taken by members on the past decisions of the FSDC.

The meeting was attended by Union Ministers of State for Finance Shri Pankaj Chaudhary and Dr. Bhagwat Kishanrao Karad; Shri Shaktikanta Das, Governor, Reserve Bank of India; Dr. T. V. Somanathan, Finance Secretary and Secretary, Department of Expenditure, Ministry of Finance; Shri Ajay Seth, Secretary, Department of Economic Affairs, Ministry of Finance; Dr. Vivek Joshi, Secretary, Department of Financial Services, Ministry of Finance; Shri Sanjay Malhotra, Secretary, Department of Revenue,  Ministry of Finance;  Dr. Manoj Govil, Secretary, Ministry of Corporate Affairs; Dr. V. Anantha Nageswaran, Chief Economic Adviser, Ministry of Finance; Ms. Madhabi Puri Buch, Chairperson, Securities and Exchange Board of India; Shri Debasish Panda, Chairperson, Insurance Regulatory and Development Authority of India; Dr. Deepak Mohanty, Chairperson, Pension Fund Regulatory and Development Authority; Shri Ravi Mital, Chairperson, Insolvency and Bankruptcy Board of India; Shri Injeti Srinivas, Chairperson, International Financial Services Centres Authority; and the Secretary of the FSDC, Department of Economic Affairs, Ministry of Finance.

2022

15-Sep-2022: Finance Minister Smt. Nirmala Sitharaman Chairs 26th meeting of the Financial Stability and Development Council

The 26th Meeting of the Financial Stability and Development Council (FSDC) was chaired by the Union Finance and Corporate Affairs Minister Smt. Nirmala Sitharaman in Mumbai today.

The Council, inter alia, deliberated on the Early Warning Indicators for the economy and our preparedness to deal with them, improving the efficiency of the existing Financial/Credit Information Systems, issues of governance and management in Systemically Important Financial Institutions including Financial Market Infrastructures, strengthening cyber security framework in financial sector, Common KYC for all financial Services and related matters, update on Account Aggregator and next steps, Issues relating to financing of Power Sector, strategic role of GIFT IFSC in New Aatmanirbhar Bharat, inter-regulatory Issues of GIFT-IFSC, and need for utilisation of the services of Registered Valuers by all Government Departments.

It was noted that there is a need to monitor the financial sector risks, the financial conditions and market developments on a continuous basis by the Government and the regulators so that  appropriate and timely action can be taken so as to mitigate any vulnerability and strengthen financial stability.

The Council also took note of the preparation in respect of financial sector issues to be taken up during India’s G20 Presidency in 2023.

The meeting was attended by Dr. Bhagwat Kishanrao Karad, MoS (Finance); Shri Pankaj Chaudhary, MoS (Finance); Shri Shaktikanta Das, Governor, Reserve Bank of India; Dr. T. V. Somanathan, Finance Secretary and Secretary, Department of Expenditure, Ministry of Finance; Shri Ajay Seth, Secretary, Department of Economic Affairs, Ministry of Finance; Shri Tarun Bajaj, Secretary, Department of Revenue, Ministry of Finance; Shri Sanjay Malhotra, Secretary, Department of Financial Services, Ministry of Finance;  Dr. V. Anantha Nageswaran, Chief Economic Adviser, Ministry of Finance; Ms. Madhabi Puri Buch, Chairperson, Securities and Exchange Board of India; Shri Debasish Panda, Chairperson, Insurance Regulatory and Development Authority of India; Shri Supratim Bandyopadhyay, Chairperson, Pension Fund Regulatory and Development Authority; Shri Ravi Mittal, Chairperson, Insolvency and Bankruptcy Board of India, Shri Injeti Srinivas, Chairperson, International Financial Services Centres Authority, and the Secretary of the FSDC, Department of Economic Affairs, Ministry of Finance.

22-Feb-2022: 25th Meeting of Financial Stability and Development Council held in Mumbai

The 25th meeting of the Financial Stability and Development Council (FSDC) was held in Mumbai today, under the Chairpersonship of Union Finance Minister Smt. Nirmala Sitharaman. The Finance Minister is on a two-day post-Budget outreach visit to the city, where she is meeting with representatives of industry, financial market functionaries and bankers.

The Council deliberated on the various mandates of the FSDC and major macro-financial challenges arising in view of global and domestic developments. The Council noted that Government and all regulators need to maintain constant vigil on the financial conditions and functioning of important financial institutions, especially considering that it could expose financial vulnerabilities in the medium and long-term. The Council discussed measures required for further development of the financial sector and to achieve an inclusive economic growth with macroeconomic stability.

The Council discussed operational issues relating to currency management. It also took note of the activities undertaken by the FSDC Sub-Committee chaired by the RBI Governor and the action taken by members on the past decisions of FSDC.

The 25th FSDC meeting was also attended by Dr. Bhagwat Kishanrao Karad, MoS (Finance); Shri Shaktikanta Das, Governor, Reserve Bank of India; Dr. T. V. Somanathan, Finance Secretary and Expenditure Secretary; Shri Ajay Seth, Economic Affairs Secretary; Shri Tarun Bajaj, Revenue Secretary; Shri Sanjay Malhotra, Financial Services Secretary; Shri Ajay Prakash Sawhney, Secretary, Ministry of Electronics and Information Technology; Shri Rajesh Verma, Secretary, Ministry of Corporate Affairs; Dr. V. Anantha Nageswaran, Chief Economic Adviser, Ministry of Finance; Shri Ajay Tyagi, Chairperson, Securities and Exchange Board of India; Shri Supratim Bandyopadhyay, Chairperson, Pension Fund Regulatory and Development Authority; Shri Injeti Srinivas, Chairperson, International Financial Services Centres Authority; Mrs. T. L. Alamelu, Member, Insurance and Regulatory Development Authority of India; and the Secretary of the FSDC, Department of Economic Affairs, Ministry of Finance.

The Financial Stability and Development Council has been set up by the government in consultation with financial market regulators, to strengthen and institutionalize the mechanism for maintaining financial stability, enhance inter-regulatory coordination and promote financial sector development. Without prejudice to the autonomy of regulators, the Council monitors macro-prudential supervision of the economy, including functioning of large financial conglomerates, and addresses inter-regulatory coordination and financial sector development issues. It also focuses on financial literacy and financial inclusion.

2021

3-Sep-2021: Finance Minister Smt. Nirmala Sitharaman chairs 24th meeting of Financial Stability and Development Council

Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman chaired the 24th meeting of the Financial Stability and Development Council (FSDC) here today.

The meeting was attended by Dr. Bhagwat Kishanrao Karad, MoS (Finance); Shri Pankaj Chaudhary, MoS (Finance); Shri Shaktikanta Das, Governor, Reserve Bank of India; Dr. T. V. Somanathan, Finance Secretary and Secretary, Department of Expenditure, Ministry of Finance; Shri Ajay Seth, Secretary, Department of Economic Affairs, Ministry of Finance; Shri Tarun Bajaj, Secretary, Department of Revenue, Ministry of Finance; Shri Debasish Panda, Secretary, Department of Financial Services, Ministry of Finance; Shri Rajesh Verma, Secretary, Ministry of Corporate Affairs; Dr. Krishnamurthy V. Subramanian, Chief Economic Adviser, Ministry of Finance; Shri Ajay Tyagi, Chairperson, Securities and Exchange Board of India; Shri Supratim Bandyopadhyay, Chairperson, Pension Fund Regulatory and Development Authority; Dr. M. S. Sahoo, Chairperson, Insolvency and Bankruptcy Board of India; Shri Injeti Srinivas, Chairperson, International Financial Services Centres Authority; Ms. T. L. Alamelu, Member (Non-Life), Insurance and Regulatory Development Authority of India; and the Secretary of the FSDC, Department of Economic Affairs, Ministry of Finance.

The meeting deliberated on the various mandates of the FSDC, viz., Financial Stability, Financial Sector Development, Inter-regulatory Coordination, Financial Literacy, Financial Inclusion, and Macro prudential supervision of the economy including the functioning of large financial conglomerates etc.

It was noted that there is a need to keep a continuous vigil by Government and all regulators on the financial conditions.

The Council also, inter alia, discussed issues relating to management of stressed assets, strengthening institutional mechanism for financial stability analysis, financial inclusion, framework for resolution of financial institutions and issues related to IBC processes, banks’ exposure to various sectors and Government, data sharing mechanisms of government authorities, internationalisation of Indian Rupee and pension sector related issues.

The Council also took note of the activities undertaken by the FSDC Sub-Committee chaired by the Governor, RBI and the action taken by members on the past decisions of FSDC.

2020

28-May-2020: Smt. Nirmala Sitharaman chairs 22nd Meeting of the Financial Stability and Development Council (FSDC)

Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman chaired the 22nd Meeting of the Financial Stability and Development Council (FSDC).

The meeting was attended by Minister of State for Finance & Corporate Affairs Shri Anurag Thakur, Shri Shaktikanta Das, Governor, Reserve Bank of India; Shri Ajay Bhushan Pandey, Finance Secretary/Secretary, Department of Revenue; Shri Tarun Bajaj, Secretary, Department of Economic Affairs; Shri Debasish Panda, Secretary, Department of Financial Services; Shri Ajay Prakash Sawhney, Secretary, Ministry of Electronics and Information Technology; Shri Injeti Srinivas, Secretary, Ministry of Corporate Affairs; Dr. Krishnamurthy V. Subramanian, Chief Economic Adviser; Shri Ajay Tyagi, Chairperson, Securities and Exchange Board of India (SEBI); Shri Subhash Chandra Khuntia, Chairperson, Insurance Regulatory and Development Authority of India (IRDAI); Shri Supratim Bandyopadhyay, Chairperson, Pension Fund Regulatory and Development Authority (PFRDA); and Dr. M. S. Sahoo, Chairperson, Insolvency and Bankruptcy Board of India (IBBI) and other senior officers of the Government of India and Financial Sector Regulators.

The meeting reviewed the current global and domestic macro-economic situation, financial stability and vulnerabilities issues, major issues likely to be faced by banks and other financial institutions as also regulatory and policy responses, Liquidity / Solvency of NBFCs/HFCs/MFIs and other related issues. Besides, market volatility, domestic resource mobilisation and capital flows issues were also discussed by the Council.

The Council noted that the COVID-19 Pandemic crisis poses a serious threat to the stability of the global financial system as the ultimate impact of the crisis and the timing of recovery, is uncertain at this point of time. While, decisive monetary and fiscal policy actions aimed at containing the fallout from the pandemic, have stabilised investor sentiment in the short-run, there is a need to keep a continuous vigil by Government and all regulators on the financial conditions that could expose financial vulnerabilities in the medium and long-term. The efforts of the Government and regulators are focused on avoiding a prolonged period of dislocation in financial markets.

 The Council took note of the initiatives taken by the Government and the regulators in the recent months to help revive the economy.  Government and the RBI have announced various fiscal and monetary measures to pre-emptively limit the economic damage and would continue to address the liquidity and capital requirements of the financial institutions.

The Council also reviewed the action taken by members on the decision taken by FSDC earlier.

2019

19-Jun-2019: FM chairs the 20th Meeting of the Financial Stability and Development Council (FSDC)

The 20th Meeting of the Financial Stability and Development Council (FSDC) was held under the Chairmanship of the Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman.

The Meeting reviewed the current global and domestic economic situation and financial stability issues including, inter-alia, those concerning Banking and NBFCs.

The Council was also apprised of the progress made towards setting-up of the Financial Data Management Centre (FDMC) to facilitate integrated data aggregation and analysis as also a Computer Emergency Response Team (CERT-Fin) towards strengthening the cyber security framework for the financial sector.

The Council also held consultations to obtain inputs/ suggestions of the financial sector regulators for the Budget. All the regulators presented their proposals for the Union Budget 2019-20.

The Council also took note of the activities undertaken by the FSDC Sub-Committee Chaired by Governor, RBI and the action taken by Members on the decisions taken in earlier Meetings of the Council.

2018

30-Oct-2018: 19th Meeting of the Financial Stability and Development Council (FSDC) held

The Nineteenth Meeting of the Financial Stability and Development Council (FSDC) under the Chairmanship of the Union Minister of Finance and Corporate Affairs, Shri Arun Jaitley reviewed the current global and domestic economic situation and financial sector performance. The Council discussed at length the issue of real interest rate, current liquidity situation, including segmental liquidity position in NBFCs and mutual fund space. The Council decided that the Regulators and the Government would keep a close watch on the developing situation and take all necessary measures.

FSDC took note of the developments regarding strengthening of Cyber Security in Financial Sector including progress made towards setting up of a Computer Emergency Response Team in the Financial Sector (CERT-Fin) under a Statutory Framework. The Council also deliberated on the need for identifying and securing critical information infrastructure in financial sector.

The Council also deliberated on the issues and challenges of Crypto Assets/Currency and was briefed about the deliberations in the High-level Committee chaired by the Secretary (Economic Affairs) to devise an appropriate legal framework to ban use of private crypto currencies in India and encouraging the use of Distributed Ledger Technology, as announced in the Budget 2018-19.

Other issues discussed include market developments and financial stability implications of the use of RegTech and SupTech by Financial Firms and Regulatory and Supervisory Authorities, and implementing the Recommendations of the Sumit Bose Committee Report on measures, such as, promoting appropriate disclosure regime for financial distribution costs.

The Council also took note of the activities undertaken by the FSDC Sub-Committee Chaired by Governor, RBI and the action taken by Members on the decisions taken in earlier Meetings of the Council.