Global financial situation daunting, but India looks well protected: DEA Secretary Ajay Seth

DEA Secretary Ajay Seth

The Indian financial sector is well-protected from the "daunting" global financial situation, Economic Affairs Secretary Ajay Seth said on May 8.

"...the global financial situation is daunting. But at the same time, the Indian economy and especially the Indian financial sector, is well protected. Well regulated systems are there," Seth said.

However, he warned that India has to be cautious and be on the look out for early warning indicators that provide signs of financial sector stress.

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Seth was speaking to the media following the meeting of the Financial Stability and Development Council (FSDC) in New Delhi.

The latest meeting of the FSDC, chaired by Finance Minister Nirmala Sitharaman, is the first since the 2023-24 Budget was presented on February 1. As such, it is also the first meeting of the Council since banking-related issues erupted in the US and Europe.

Seth said the FSDC discussed the issue of financial stability and how it was was "a shared responsibility" of all regulators.

The Council also discussed the issue of cyber-security.

"…higher level of preparedness is needed for cyber-security of all regulated entities, especially the large regulated entities, systemically important financial institutions, as well as financial market infrastructure," Seth said.

The secretary also said the FSDC discussed the issue of unclaimed deposits at its meeting.

"Regulators should conduct a special drive to facilitate the settlement of unclaimed deposits and claims in the financial sector across all segments, such as banking deposits, shares and dividends, mutual funds, insurance, etc," the government said in a statement.

The Sitharaman-chaired FSDC meeting was attended by the two ministers of state for finances, secretaries from the finance and corporate affairs ministry, and heads of financial sector regulators.