State PCS - Maharashtra (MPSC)

• 13 Jun 2025

29th Financial Stability and Development Council (FSDC)

Why in News? 

The Union Minister for Finance and Corporate Affairs chaired the 29th meeting of the Financial Stability and Development Council (FSDC) in Mumbai, Maharashtra.

Key Points 

• About FSDC: 
  • The FSDC is a non-statutory apex council established by an executive order in 2010. It functions under the aegis of the Ministry of Finance. 
  • The idea for creating the FSDC was first recommended by the Raghuram Rajan Committee on Financial Sector Reforms in 2008. 
  • It is chaired by the Union Finance Minister and includes the heads of financial sector regulators such as the RBI, SEBI, Insurance Regulatory and Development Authority of India (IRDAI), and Pension Fund Regulatory and Development Authority (PFRDA) and Chief Economic Adviser (CEA) among others. 
  • Key Objectives: 
    • To monitor macroeconomic and financial sector developments. 
    • To assess and manage systemic risks that may threaten financial stability. 
    • To enhance inter-regulatory coordination among key financial sector regulators. 
    • To foster financial sector development and promote financial inclusion across the country. 

 

• Deliberations of the 29th FSDC Meeting: 
  • Focus on Macro-Financial Stability: 
    • The FSDC discussed key issues concerning macro-financial stability and India’s preparedness to manage associated risks. 
    • The Council emphasised vigilance in light of both domestic and global macroeconomic trends. 
  • Cybersecurity and Resilience Strategy: 
    • Based on the analysis of sectoral cybersecurity preparedness and the Financial Sector Assessment Programme (FSAP) 2024–25 recommendations, the FSDC proposed a financial sector-specific cybersecurity strategy. 
    • The aim is to strengthen the cyber resilience framework across financial regulators and institutions. 

Note: The Financial Sector Assessment Program (FSAP) is a periodic assessment jointly conducted by the IMF and World Bank in countries with significant financial sectors, which aims to comprehensively analyse financial stability and sector development.  

• India underwent its first FSAP in 2011-12 and the second in 2017 and India's third FSAP is scheduled for 2023-24, with reports expected to be published by February 2025.