Constant monitoring of financial conditions & operation of institutions is required: FSDC

The Council deliberated on operational issues concerning currency management.

Smt. Nirmala Sitharaman, Union Finance Minister, presided over the 25th meeting of the Financial Stability and Development Council (FSDC) today in Mumbai. The Finance Minister is in the city for a two-day post-Budget outreach visit, meeting with industry representatives, financial market functionaries, and bankers.

The Council discussed the FSDC’s various mandates as well as major macro-financial challenges arising from global and domestic developments. The Council stated that the government and all regulators must keep a close eye on the financial conditions and operations of major financial institutions, especially given the possibility of exposing financial vulnerabilities in the medium and long term.

The Council discussed the steps that must be taken to further develop the financial sector and achieve inclusive economic growth while maintaining macroeconomic stability.

The Council deliberated on operational issues concerning currency management. It also took note of the activities of the FSDC Sub-Committee, chaired by the RBI Governor, as well as the actions were taken by members on previous FSDC decisions.

The government established the Financial Stability and Development Council in consultation with financial market regulators to strengthen and institutionalize the mechanism for maintaining financial stability, improve inter-regulatory coordination, and promote financial sector development.

The Council monitors macro-prudential supervision of the economy, including the functioning of large financial conglomerates, and addresses inter-regulatory coordination and financial sector development issues without jeopardizing regulators’ autonomy. It also emphasizes financial literacy and inclusion.

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