The Financial Stability and Development Council (FSDC), headed by finance minister Nirmala Sitharaman, on Thursday underscored the need for continuous monitoring of risks in the financial sector so that necessary action can be taken on time to mitigate any vulnerability.
In the 26th meeting of the Council, which was attended by financial sector regulators and other officials, also reviewed issues relating to the financial sector that can be taken up during India’s G20 Presidency in 2023.
The meeting was held at a time when key central banks are aggressively raising interest rates to curb runaway inflation, while the conflict in Ukraine continues to pose risks to both inflation and growth forecasts.
According to an official statement after the meeting, the Council deliberated on the early-warning indicators for the economy and “our preparedness to deal with them”. It also discussed improving the efficiency of the existing financial and credit information systems, issues of governance and management in systemically important financial institutions, including financial market infrastructures, strengthening cyber security framework in the financial sector, common KYC for all financial Services and related matters and update on account aggregator system. At the same time, the meeting deliberated on issues relating to the financing of power sector, strategic role the GIFT international financial services centre can play and inter-regulatory there.
“It was noted that there is a need to monitor the financial sector risks, the financial conditions and market developments on a continuous basis by the Government and the regulators so that appropriate and timely action can be taken so as to mitigate any vulnerability and strengthen financial stability,” the finance ministry said in a statement.
The FSDC meeting was attended by ministers of state for finance Bhagwat Kishanrao Karad and Pankaj Chaudhary, Reserve Bank of India governor Shaktikanta Das, top secretaries of various finance ministry departments, IFSC Authority chairman Injeti Srinivas, chief economic advisor V Anantha Nageswaran, Sebi chairperson Madhabi Puri Buch, IRDAI chief Debasish Panda and IBBI chirman Ravi Mittal, among others.