NEW DELHI: The Financial Stability and Development Council (FSDC) has cautioned the government to keep a constant vigil and to be in a state of preparedness of managing any external and internal vulnerability, despite the current macro-economic stability. The Council also suggested hastening the pace of progress made in setting up of Computer Emergency Response Team in the Financial Sector (CERT-Fin) and Financial Data Management Centre. It also discussed measures for time-bound implementation of the institution building initiative.
Arvind Subramanian, Chief Economic Adviser, said that India has achieved macro-economic stability on the back of improvements in its macro-economic fundamentals and structural reforms with the launch of the goods and services tax (GST). This also included the action being taken to address the twin-balance sheet problem.
The extraordinary financial market confidence is reflected in high and rising bonds and especially stock valuations and long-term positive consequences of demonetisation, he said.
Set up in 2010, FSDC deals with issues related to financial stability, financial-sector development, inter-regulatory coordination, financial literacy, financial inclusion and macro-prudential supervision of the economy including the functioning of large financial conglomerates.
It technically acts as an apex-level forum to strengthen and institutionalise the mechanism for maintaining financial stability and also enhance inter-regulatory coordination and promoting financial sector development.
The Council also took note of the progress of Financial Sector Assessment Program for India, jointly conducted by the International Monetary Fund and the World Bank. The Council directed that the assessment report be finalised by the end of this calendar year. The Council discussed on the Central KYC Registry system and deliberated on strengthening the regulation of the credit rating agencies.
The 17th meeting of FSDC was held in New Delhi on Tuesday under the chairmanship of FM Arun Jaitley.
FSDC oversees Issues related to financial stability, financial-sector development, inter-regulatory coordination, financial literacy, financial inclusion and macro-prudential supervision of the country’s economy