UPSC Articles
The Financial Stability and Development Council (FSDC) meeting held
Part of: GS-Prelims and GS-III – Economy
In News:
- Recently, The Financial Stability and Development Council (FSDC) meeting was held through video conferencing.
- The meeting was chaired by the Indian Finance Minister.
Key takeaways
- It was noted that the COVID-19 pandemic poses a serious threat to the stability of the global financial system since its impact and timing of recovery was still uncertain.
- It highlighted the need for the government and regulators to remain vigilant on financial conditions that could expose systemic vulnerabilities.
- It also assured that the government and regulators would continue to provide liquidity and capital support to domestic financial institutions.
- Liquidity and solvency positions of non-banking financial companies, housing finance companies and micro-finance institutions were reviewed.
Important value additions
The Financial Stability and Development Council (FSDC)
- It is a non-statutory apex council under the Ministry of Finance.
- It was constituted by the Executive Order in 2010.
- Its constitution was proposed by the Raghuram Rajan committee (2008) on financial sector reforms.
- It is chaired by the Finance Minister and its members include:
- The heads of all Financial Sector Regulators (RBI, SEBI, PFRDA & IRDA)
- Finance Secretary
- Secretary of Department of Economic Affairs (DEA)
- Secretary of Department of Financial Services (DFS)
- Chief Economic Adviser
- Minister of State for the Department of Economic Affairs (DEA)
- Secretary of Department of Electronics and Information Technology,
- Chairperson of the Insolvency and Bankruptcy Board of India (IBBI)
- Revenue Secretary.
- The Council can invite experts to its meeting if required.
- Objectives:
- To strengthen and institutionalize the mechanism for maintaining financial stability
- Enhancing inter-regulatory coordination
- Promoting financial sector development
- Assess the functioning of the large financial conglomerates.
