New Delhi:The Financial Stability and Development Council has stressed on the need for the government and all regulators to maintain continuous vigil on the financial conditions that could expose the country to financial vulnerabilities in the medium and long term.
The 23rd meeting of the Council chaired by Finance Minister Nirmala Sitharaman through video conference on Tuesday also noted with satisfaction that the policy measures taken by the government and the financial sector regulatory authorities have ensured faster economic recovery in India as reflected in the reduced contraction of GDP in Q2 of 2020-21.
The FSDC is an apex level forum created by the Centre to strengthen and institutionalise the mechanism for maintaining financial stability and enhance inter-regulatory coordination while promoting financial sector development in the country. It includes officials from the Finance Ministry and heads of financial sector regulators (RBI, SEBI, PFRDA, IRDAI) and is chaired by the Finance Minister.
The meeting on Tuesday reviewed the major macroeconomic developments and financial stability issues (global and domestic) with special reference to vulnerability related issues and noted that the economy has gained momentum and the path to recovery will be faster than what was predicted earlier.
The discussions were held on further measures which may be required to be taken to ensure consistent support of the financial sector for achieving faster real economic growth and achieving the overall macroeconomic targets, while continuing to maintain financial stability. The Council also discussed the budget proposals submitted by the RBI and other regulators.
The FSDC also discussed the challenges involved in the smooth transition of London Interbank Offer Rate (LIBOR) based contracts and noted that a multipronged strategy involving relevant stakeholder institutions and departments is required in this regard.
The Council took note of the activities undertaken by the FSDC sub-committee chaired by the Governor of RBI and the actions taken by the members on FSDC decisions earlier.