FSDC meet discusses macro-financial stability, simplification of digital KYC process

The Financial Stability and Development Council (FSDC) met in New Delhi on February 21.

India's Financial Stability and Development Council (FSDC) met on February 21 in New Delhi and discussed a range of issues, including macro-financial stability and matters related to Know-Your-Customer (KYC) norms.

"The FSDC considered the domestic and global macro-financial situation and emphasised that the members need to maintain constant vigilance and continue their proactive efforts towards detecting emerging financial stability risks and taking the necessary measures to maintain the resilience of the financial sector," the finance ministry said in a statement on February 21.

"The FSDC members also decided to strengthen inter-regulatory coordination to further develop the financial sector so that it continues to provide the requisite financial resources for inclusive economic growth," it added.

The FSDC is chaired by Finance Minister Nirmala Sitharaman. Other officials present at the meeting included secretaries from the finance, corporate affairs, and information technology ministries, Reserve Bank of India (RBI) Governor Shaktikanta Das, Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch. Heads of the Insurance Regulatory and Development Authority of India (IRDAI), Pension Fund Regulatory and Development Authority (PFRDA), Insolvency and Bankruptcy Board of India (IBBI), and the International Financial Services Centres Authority (IFSCA) were also present.

This is the first meeting of the FSDC in nearly 10 months and comes weeks after the RBI ordered Paytm Payments Bank to wind down its operations by February 29 - before extending the deadline to March 15 - due to "persistent non-compliances and continued material supervisory concerns".

Sitharaman is set to meet over a dozen fintech firms next week and emphasise the importance of KYC compliance.

Ahead of that meeting, the FSDC on February 21 discussed prescribing uniform KYC norms, inter-usability of KYC records across the financial sector, and simplification and digitalisation of the KYC process. It also deliberated on kick-starting fund-raising by social enterprises through social stock exchanges and ways to end the adverse impact of unauthorised digital lending and steps to contain their spread.

"The ongoing inter-regulatory issues were also discussed to support GIFT IFSC in its strategic role to become one of the world's premier international financial centres and perform its envisioned role of facilitating foreign capital and financial services for the domestic economy," the finance ministry's statement added.