FSDC Current Affairs - 2019

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FM chairs 20th Meeting of FSDC

The 20th Meeting of Financial Stability and Development Council (FSDC) was held under the Chairmanship of Smt. Nirmala Sitharaman, Union Minister of Finance and Corporate Affairs.

Key Highlights of Meeting

The Meeting reviewed current global and domestic economic situation, overall macro-economic situation and financial stability issues including those concerning Banking and Non Banking Financial Company (NBFC).

Council was also informed about progress made towards setting-up of Financial Data Management Centre (FDMC) under the aegis of FSDC, so as to facilitate integrated data aggregation and analysis as also a Computer Emergency Response Team (CERT-Fin) towards strengthening cyber security framework for financial sector.

Council also held consultations to obtain inputs and suggestions of Financial Regulators for Union Budget 2019-20. All the regulators presented their proposals for upcoming Budget. The financial sector regulators includes- SEBI (Capital Market), RBI (Monetary Sector), IRDA (Insurance), PFRDA (Pension) and IBC (Insolvency & Bankruptcy).

Council also took note of activities undertaken by FSDC Sub-Committee which is chaired by Reserve Bank of India (RBI) Governor and action taken by Members on decisions taken in earlier Meetings of FSDC.

What is Financial Stability and Development Council?

The FSDC was constituted in December 2010. It is apex body of sectoral regulators and not a statutory body.

Objective: to strengthen and institutionalise mechanism for maintaining financial stability, promoting financial sector development and enhancing inter-regulatory coordination.

Function: Among other things, it deals with issues relating to financial stability, financial literacy, financial inclusion, financial sector development, inter–regulatory coordination and macro prudential supervision of economy which also includes functioning of large financial conglomerates. No separate funds are allocated to Council for undertaking its activities.

FSDC Sub-Committee: It deliberates on agenda items proposed by any member of FSDC Council which mainly include matters relating to financial stability, inter-regulatory coordination, and financial sector development.

Government reconstitutes FSDC: Includes secretaries from Revenue Department, MeitY, IBC Chairman

The Union Government has reconstituted Financial Stability and Development Council (FSDC) to include secretaries from revenue department as well as Ministry of Information Technology (MeitY). It  will include Chairman of the Insolvency and Bankruptcy Board of India (IBBI). This decision will make FSDC more broad-based to incorporate changes in economic regulatory framework of the country.

Key Facts

Inclusion of MeitY Secretary in FSDC becomes significant given massive digitisation push in country and rising apprehensions around safety of personal data as both public and private sectors are collecting and using personal data on an unprecedented scale and for multiple purposes. Moreover, inclusion of revenue secretary in follows increasing safeguards being put in place by Department of Revenue to check tax evasion (both direct and indirect taxes).

Financial Stability and Development Council (FSDC)

FSDC is super regulatory body for regulating financial sector which is vital for bringing healthy and efficient financial system in economy of the country. Its mandate is to strengthen and institutionalise mechanism of maintaining financial stability, financial sector development, inter-regulatory coordination along with monitoring macro-prudential regulation of economy. Union Finance Minister is chairman of FSDC. Its members are heads of financial sector regulatory authorities (i.e, RBI, SEBI, IRDA, PFRDA), Finance Secretary and Secretary, Department of Economic Affair; Secretary, Department of Financial Services, and Chief Economic Adviser. FSDC was set up in 2010 by then Finance Minister Pranab Mukherjee to strengthen and institutionalise mechanism for maintaining financial stability, enhancing inter-regulatory coordination and promoting financial sector development.