India’s Financial Stability and Development Council, chaired by Finance and Corporate Affairs Minister Nirmala Sitharaman, on September 15, deliberated on a raft of issues including early warning indicators for the economy and issues relating to the financing of the power sector.
“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 government said in a statement after the council’s meeting held in Mumbai concluded.
The FSDC included top finance ministry officials as well as Reserve Bank of India Governor Shaktikanta Das, Chief Economic Adviser V Anantha Nageswaran, Securities and Exchange Board of India Chairperson Madhabi Puri Buch, and heads of the insurance, pension and insolvency bodies, among others. At the meeting, it deliberated on improving the efficiency of the existing credit information systems, and issues of governance and management in systemically important financial institutions including financial market infrastructures.
The council also took up the issues of strengthening the cyber security framework in the financial sector, common KYC for all financial services, update on account aggregator, and the strategic role of GIFT IFSC.
It also noted the preparation in respect of financial sector issues to be taken up during India’s G20 Presidency next year.
India's economy has recovered to pre-pandemic levels but the recovery is threatened by global and domestic headwinds including inflation, slowing global growth and monetary tightening.
Asia's third-largest economy did not undertake a large fiscal stimulus like several developed countries did after the pandemic hit, but relied largely on targeted relief to the poor and vulnerable sectors.
India's central bank had slashed interest rates and infused hefty liquidity which had sent the markets booming and fuelled asset prices. It has since withdrawn most of the pandemic-era stimulus as it shifts focus to curbing red-hot inflation.
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