Financial Stability and Development Council (FSDC) Meeting

• 04 Sep 2021

Why in News

Recently, the Finance Minister chaired the 24^th meeting of the Financial Stability and Development Council (FSDC).

• The council discussed issu-es relating to management of stressed assets, strengthening institutional mechanisms for financial stability analysis, issues related to IBC (Insolvency and Bankruptcy Code), data sharing mechanisms of government authorities, internationalisation of the Indian rupee and pension sector related issues.

Key Points

• Establishment:
  
  • A non-statutory apex council under the Ministry of Finance constituted by the Executive Order in 2010.
  • The Raghuram Rajan committee (2008) on financial sector reforms first proposed the creation of FSDC.
• Composition:
  
  • 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), and Chief Economic Adviser.
    
    • In 2018, the government reconstituted FSDC to include the Minister of State responsible 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) and the Revenue Secretary.
  • FSDC sub-committee is headed by the Governor of RBI.
  • The Council can invite experts to its meeting if required.
• Functions:
  
  • To strengthen and institutionalize the mechanism for maintaining financial stability, enhancing inter-regulatory coordination and promoting financial sector development.
  • To monitor macro-prudential supervision of the economy. It assesses the functioning of the large financial conglomerates.

Source: TH