Sebi Chairman U K Sinha on his part sought to calm the markets saying regulations are in place to curb any excessive volatility and the regulator in keeping a very close watch on stock movements.
Emerging from the meeting of the FSDC, where the volatility in stock markets figured during discussions, RBI Governor Raghuram Rajan said the central bank is prepared to deal with any kind of eventuality that may occur over next few days.
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Over last three trading sessions, the BSE benchmark Sensex has rallied over 1,500 points and the NSE's Nifty nearly 450 points. The markets are expected to remain volatile in view of the results of the general elections which will be announced on May 16.
At the meeting Chidambaram, according to a Finance Ministry statement, urged all the regulators to be watchful of developments in the market and large volatility in key parameters.
Chidambaram also called upon the regulators and the Ministry officials "to be in a state of readiness and take necessary action if the situation so warrants".
Sinha said the market regulator is watching the situation very carefully and all the systems are in place.
"There is no need for anybody to worry. If we find that anybody is doing anything wrong, is in violation of any of Sebi's regulation, we will take prompt action," Sinha said.RBI Chief Rajan too said: "The regulators have examined the financial system over last few weeks. We have conducted a variety of tests. We are in many ways prepared for any kind of volatility that might emerge over the next few days".
The 10th meeting of the Financial Stability and Development Council (FSDC) today took stock of the Indian economy and deliberated on domestic and growth scenario, fiscal, monetary and external sector, foreign capital flows.
It also discussed on inflation, developments in financial markets as also the outlook and challenges facing the economy.
The Council also discussed the detailed assessment of external sector vulnerabilities of the economy while recognising the improvement made in controlling CAD, exchange rate volatility.
Besides Sebi and RBI, the FSDC meeting was attended by IRDA Chairman T S Vijayan, FMC Chairman Ramesh Abhishek, Finance Secretary Arvind Mayaram and Financial Services Secretary G S Sandhu among others.
The FSDC was also apprised of the progress made by the FSDC sub-committee and its technical groups in areas like bank capital requirements, non-legislative recommendations of FSLRC, strengthening and deepening of interest rate futures market and lending by insurance companies, among other things.