- The Central Government had established Financial Stability and Development Council (FSDC) in December 2010 with the Finance Minister as it Chairman.
- The idea to create it was first mooted by the Raghuram Rajan Committee on Financial Sector Reforms in 2008.
- 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 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.
- 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.
- Changes: 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).
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.
- Focus on financial literacy and financial inclusion.
- Monitor macro-prudential supervision of the economy.
- Assess the functioning of the large financial conglomerates.