What is Financial Stability and Development Council
The Financial Stability and Development Council (FSDC) was constituted by an Executive Order of the Union Government as a non-statutory apex body under the Ministry of Finance in 2010.
The Raghuram Rajan Committee (2008) on financial sector reforms first proposed the creation of FSDC.
FSDC – Council Members
The membership of the FSDC is discussed below.
The Finance Minister is the Chairman of the FSDC.
Members of FSDC include Heads of the Financial Sector Regulators listed below:
Reserve Bank of India
Insurance Regulatory and Development Authority
Securities and Exchange Board of India
Pension Fund Regulatory and Development Authority
Other members are Finance Secretary, Chief Economics Advisor and Secretary of the Department of Financial Services.
FSDC Member Reforms
The government reconstituted the FSDC to include the following Members in the Council.
Minister of State responsible for the Department of Economic Affairs
Secretary of the Department of Electronics and Information Technology
Revenue Secretary
Chairman of the Insolvency and Bankruptcy Board of India
The reconstitution would make FSDC more broad-based to incorporate changes in the economic regulatory framework of the country.
Functions of FSDC - Responsibilities of FSDC
The Financial Stability and Development Council is an apex body in various countries designed to maintain financial stability and promote the development of the financial sector.
Responsibilities:
Financial Stability:
Monitor and assess potential risks and vulnerabilities in the financial system.
Develop and implement measures to safeguard financial stability.
Address potential systemic concerns across different financial institutions.
Financial Sector Development:
Promote the competitiveness, efficiency, and inclusiveness of the financial sector.
Encourage innovation and the development of new financial products and services.
Foster long-term sustainable growth of the financial sector.
Inter-Regulatory Coordination:
Address issues that require coordinated action by different financial regulators.
Ensure consistency and coherence in regulatory policies across different sectors.
Facilitate information sharing and collaboration among regulators.
Financial Literacy and Inclusion:
Promote financial literacy and awareness among the public.
Facilitate financial inclusion by expanding access to financial products and services for underserved populations.
Encourage responsible financial behavior among individuals and businesses.
Macroprudential Supervision:
Monitor and assess risks to the wider economy arising from the financial sector.
Use macroprudential tools to address systemic risks and promote financial stability.
Coordinate macroprudential policies with monetary and fiscal policies.
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