Financial Stability and Development Council i.e. FSDC is an apex regulatory body constituted by the Government of India. FSDC was created after the global financial crisis of 2008 when some similar institutions were created in some other countries. The reason behind its creation was mainly to handle financial uncertainty. FSDC has replaced the High-Level Coordination Committee on Financial Markets, which was facilitating the regulatory coordination functions prior to setting up of FSDC, though it was not a formal body.
The Financial Stability and Development Council was constituted on the recommendations of the Raghuram Rajan Committee on Financial Sector Reforms in 2008. The FSDC is an autonomous body which deals with the financial regularities in the entire financial sector of India.
Functions of FSDC
As the name of the council itself states about its functions, the FSDC is responsible for Financial stability and the Development of Financial Sector in India. Other than these two functions, FSDC is also responsible for Inter-regulatory coordination, financial literacy and financial inclusion within the country. No funds are allocated separately to the council for undertaking its activities.
Members of FSDC
The Finance Minister of India (Arun Jaitley currently) is the chairman of Financial Stability and Development Council. As you can see him here.
Other than him, there are about 10 members in the council including heads of various regulatory bodies. The members of FSDC are as:
Members from Regulatory Bodies
- RBI Governor (RBI Governor is also the head of FSDC Sub-committee).
- Chairman of Securities and Exchange Board of India i.e. SEBI.
- Chairman of Insurance Regulatory and Development Authority of India i.e. IRDAI.
- Chairman of Pension Fund Regulatory and Development Authority i.e. PFRDA.
- Chairman of Insolvency and Bankruptcy Board of India i.e. IBBI.
Members from Government Departments
- Finance Secretary or Secretary of Department of Economic Affairs.
- Secretary of Department of Financial Services.
- Secretary of Ministry of Corporate Affairs.
- Chief Economic Advisor, Ministry of Finance.
- Secretary of Ministry of Electronics & Information Technology i.e. MeitY. (Included in May 2018 by the Government of India through a Gazette notification. The reason to add was increased focus of the government on the digital economy).
Titbits of recently held FSDC meeting
- It was the 19th meeting of FSDC which held in New Delhi.
- The council discussed many issues related to real interest rate, current liquidity situation, including segmental liquidity position in NBFCs (Non-Banking Financial Companies) and the mutual fund sector.
- RBI Governor Urjit Patel said the liquidity scenario among NBFCs was not as severe as it was being made out to be. But he also assured the government that the RBI would ensure adequate liquidity in the system.
- All four RBI deputy governors attended the FSDC meeting along with RBI Governor Urjit Patel. Currently, the four Deputy Governors of RBI are as shown in the picture below.
Click here to read about Monetary Policy of RBI.