FSDC

Subject: National Organization

Context: The Financial Stability and Development Council (FSDC) discussed measures that may be needed to support the financial sector for achieving faster real economic growth and achieving the overall macroeconomic targets.

Concept:

• 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.

Council Members

• 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 (RBI)
• Insurance Regulatory and Development Authority (IRDA)
• Securities and Exchange Board of India (SEBI)
• Pension Fund Regulatory and Development Authority (PFRDA)
• Other members are Finance Secretary, Chief Economic Advisor and Secretary of the Department of Financial Services.

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 (DEA)
• Secretary of the Department of Electronics and Information Technology
• Revenue Secretary
• Chairman of the Insolvency and Bankruptcy Board of India (IBBI)
• The reconstitution would make FSDC more broad-based to incorporate changes in the economic regulatory framework of the country.

Functions of FSDC

• The Financial Stability and Development Council was established as an autonomous body dealing with macro prudential and financial regularities in the entire financial sector of India.
• The body envisages to strengthen and institutionalize the mechanism of maintaining financial stability, financial sector development, inter-regulatory coordination along with monitoring macro-prudential regulation of the economy.
• It must be noted that no funds are separately allocated to the council for undertaking its activities.