Financial Stability and Development Council (FSDC)

 
 
Basic Facts:
  • It is a super regulatory body for regulating financial sector which is a vital for bringing healthy and efficient financial system in the economy.
  • The idea to create it was first mooted by the Raghuram Rajan Committee on Financial Sector Reforms in 2008.
  • The Central Government had established Financial Stability and Development Council (FSDC) in December 2010 with the Finance Minister as it Chairman.
  • The FSDC envisages to strengthen and institutionalise mechanism of
    • Maintaining financial stability,
    • Financial sector development,
    • Inter-regulatory coordination along with monitoring macro-prudential regulation of economy.
 
Composition of FSDC
Chairman: Union Finance Minister.
Members:
  • Heads of the financial sector regulatory authorities (i.e, RBI, SEBI, IRDA, PFRDA),
  • Finance Secretary and/or Secretary, Department of Economic Affairs (Union Finance Ministry), Secretary, Department of Financial Services, and Chief Economic Adviser.
  • FSDC can invite experts to its meeting if required.
 
Two Core functions
  • Act as an apex level forum to strengthen and institutionalize the mechanism for maintaining financial stability.
  • Enhance inter-regulatory coordination and promoting financial sector development in the country.
 
Other functions
  • Focus on financial literacy and financial inclusion.
  • Monitor macro-prudential supervision of the economy.
  • Assess the functioning of the large financial conglomerates.
 

 

 

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