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On October 30, 2018, the 19th Meeting of the Financial Stability and Development Council (FSDC) was held under the Chairmanship of the Union Minister of Finance and Corporate Affairs, Shri ArunJaitley in New Delhi.

Objective:

To review the current global and domestic economic situation and financial sector performance.

Key Points:

  • Issue of real interest rate, current liquidity situation, including segmental liquidity position in NBFCs and mutual fund space,
  • Developments regarding strengthening of Cyber Security in Financial Sector,
  • Progress in setting up of a Computer Emergency Response Team in the Financial Sector (CERT-Fin),
  • Challenges of Crypto Assets/Currency,
  • Market developments and financial stability implications of the use of RegTech and SupTechby Financial Firms and Regulatory and Supervisory Authorities,
  • Implementing the Recommendations of the Sumit Bose Committee Report  on measures, such as, promoting appropriate disclosure regime for financial distribution costs,
  • Reviewing activities undertaken by the FSDC Sub-Committee Chaired by Governor, RBI.
  • The Council also deliberated on the need for identifying and securing critical information infrastructure in financial sector,
  • 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. This was recommended by the High-level Committee chaired by the Secretary (Economic Affairs).

About FSDC:

The Financial Stability and Development Council (FSDC) was constituted in December, 2010. The FSDC was set up to strengthen and institutionalise the mechanism for maintaining financial stability, enhancing inter-regulatory coordination and promoting financial sector development.

Composition:

The Council is chaired by the Union Finance Minister and its members are Governor, Reserve Bank of India; Finance Secretary and/or Secretary, Department of Economic Affairs; Secretary, Department of Financial Services; Chief Economic Adviser, Ministry of Finance; Chairman, Securities and Exchange Board of India; Chairman, Insurance Regulatory and Development Authority and Chairman, Pension Fund Regulatory and Development Authority. It also includes the chairman of the Insolvency and Bankruptcy Board (IBBI).

In May, the government through a gazette notification, had included ministry of electronics and information technology (MeitY) secretary in the FSDC in view of the increased focus of the government on digital economy.

What it does?

The Council deals, inter-alia, with issues relating to 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. No funds are separately allocated to the Council for undertaking its activities.

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