23rd Meeting of Financial Stability and Development Council
The Union Finance Minister Smt Nirmala Sitharaman recently chaired the 23rd meeting of the Financial Stability and Development Council. At the meet, the minister reviewed the financial stability issues, policy measures taken by the government of India. During the meet, the council took note of the activities undertaken by the FSDC Sub Committee chaired by Governor of RBI. It also discussed the challenges involved in transition of London Interbank Offer Rate (LIBOR) based contracts.
Financial Stability and Development Council
It was set up in 2010. It is a non-statutory apex body that consists of financial regulators of the country. It is the highest decision making forum in matters related to financial stability. The members of the council are Governor of RBI, secretary of Department of Economic Affairs, chief Economic Advisor of Ministry of Finance, Pension Fund Regulatory and Development Authority, Insurance Regulatory and Development Authority. It also includes the Chairman of IBBI (Insolvency and Bankruptcy Board).
Responsibilities of the Financial Stability and Development council
The responsibilities of FSDC are as follows
- Inter-Regulatory Coordination
- Financial Stability
- Financial inclusion and Financial literacy
- Financial sector development
- Macro Prudential surveillance of the economy
The council deals with issued related to financial sector development, macro prudential supervision of the economy. The Government of India does not allocate separate funds for the functioning of the council.
What is Financial Stability?
It means that the financial institutions are collectively able to deliver their functions properly and withstand external shocks.
According to the India Financial Stability Report, the financial stability is defined as the situation where the financial sector provides critical services to the country without any discontinuities. The India Financial Stability Report is published by the Reserve Bank of India.
Category: Economy & Banking Current Affairs