FSDC asks regulators to keep constant vigil on financial sector

The high-level FSDC headed by Finance Minister Nirmala Sitharaman on Friday discussed a host of issues concerning the economy and underlined the need for keeping a continuous vigil on financial sector

The high-level FSDC headed by Finance Minister Nirmala Sitharaman on Friday discussed a host of issues concerning the economy and underlined the need for keeping a continuous vigil on the financial sector by the government as well as different regulators.

Presided over by Sitharaman, the Financial Stability and Development Council (FSDC) meeting was attended by various financial sector regulators, including RBI Governor Shaktikanta Das.

The 24th meeting deliberated on various mandates of the FSDC like 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, the finance ministry said in a statement.

"It was noted that there is a need to keep a continuous vigil by Government and all regulators on the financial conditions," it said.

It also discussed issues relating to management of stressed assets, strengthening institutional mechanism for financial stability analysis, framework for resolution of financial institutions and issues related to IBC, banks' exposure to various sectors and government, data sharing mechanisms of government authorities, internationalisation of Indian rupee and pension sector related issues.

This was the first meeting of the high-level panel in the current financial year. The last meeting (23rd) was held on December 15, 2020.

The council also took note of the activities undertaken by the FSDC Sub-Committee chaired by the RBI Governor and the action taken by members on the past decisions of FSDC.

The meeting was held in the backdrop of a record 20.1 per cent GDP growth in the April-June quarter, helped by a very weak base of last year and a sharp rebound in the manufacturing and services sectors in spite of a devastating second wave of COVID-19 cases.

Both Ministers of State for Finance Bhagwat K Karad and Pankaj Chaudhary were present at the meeting.

Besides the RBI Governor, Securities and Exchange Board of India (Sebi) Chairman Ajay Tyagi; Insolvency and Bankruptcy Board of India (IBBI) Chairman M S Sahoo; Pension Fund Regulatory and Development Authority (PFRDA) Chairman Supratim Bandyopadhyay; and International Financial Services Centres Authority (IFSCA) Chairman Injeti Srinivas attended the meeting.

Finance Secretary T V Somanathan, Economic Affairs Secretary Ajay Seth, Revenue Secretary Tarun Bajaj, Financial Services Secretary Debasish Panda, Corporate Affairs Secretary Rajesh Verma and other top officials of the finance ministry were also present.