Alertness needed on current global volatility, agrees FSDC panel

The panel is of the view that India's macro economic fundamentals are quite strong and there is no immediate cause of worry

At a time of global equity, currency and commodity markets volatility, India needs to remain alert, though there is no immediate cause of concern, went a government statement after a meeting of the Financial Stability and Development Council sub-committee in Mumbai on Thursday.

“The sub-committee was of the view that our macro economic fundamentals are quite strong and there is no immediate cause of worry due to the international economic situation. However, there was need to be vigilant and to keep a watch...There was commonality of views,” went the statement from the finance ministry.

The sub-panel, headed by Reserve Bank governor Raghuram Rajan, reviewed domestic and international developments, and their impact on financial stability in the country. It also discussed issues related to inter-regulatory coordination for reporting under treaty to enforce America's Foreign Account Tax Compliance Act, the Central KYC Registry and International Financial Services Centre. So were development of the corporate bond market and pension funds.

Beside Rajan, the meeting was attended by finance secretary Ratan Watal, economic affairs secretary Shaktikanta Das, financial services secretary Anjuly Chib Duggal and RBI's four deputy governors.

After the meeting, Das tweeted: "Finance ministry, RBI, all regulators to be vigilant. India's macro economic stability to be strengthened and capitalised."

The meeting was also attended by financial sector regulators, including U K Sinha, head of the capital markets regulatory agency; T S Vijayan, his insurance sector counterpart, and Hemant G Contractor, head of the pensions authority. The meeting was against the backdrop of China's yuan devaluation, impacting markets globally. After that, Indian stock and currency markets saw a sharp decline due to outflow of foreign funds.