• In pursuance of the announcement made in the Union Budget 2010–11 and with a view to strengthen and institutionalize the mechanism for maintaining financial stability and enhancing inter-regulatory coordination, Indian Government has set up an apex-level Financial Stability and Development Council (FSDC), vide its notification dated 30th December, 2010.
  • FSDC has replaced the High Level Coordination Committee on Financial Markets (HLCCFM), which was facilitating regulatory coordination, though informally, prior to the setting up of FSDC.
  • The technical committee under HLCCFM for RBI regulated entities, though at a modest level, had set up a Financial Conglomerate Monitoring Mechanism since 2004.
  • The secretariat of HLCCFM was in Ministry of Finance (Capital Market Division, Department of Economic Affairs)
  • The Chairman of the FSDC is the Finance Minister of India and its members include the heads of the financial sector regulatory authorities (i.e, SEBI, IRDA, RBI, PFRDA and FMC) , Finance Secretary and/or Secretary, Department of Economic Affairs (Ministry of Finance), Secretary, (Department of Financial Services, Ministry of Finance) and the Chief Economic Adviser.
  • The commodities markets regulator, Forward Markets Commission (FMC) was added to the FSDC in December 2013 subsequent to shifting of administrative jurisdiction of commodities market regulation from Ministry of consumer Affairs to Ministry of Finance.
  • The Joint Secretary (Capital Markets Division, Department of Economic Affairs, Ministry of Finance) was the Secretary of the Council till August 2013.
  • Now this post is being held by the Additional Secretary in the Ministry of Finance.
  • A sub-committee of FSDC has also been set up under the chairmanship of Governor RBI.
  • The Sub-Committee discusses and decides on a range of issues relating to financial sector development and stability including substantive issues relating to inter-regulatory coordination.
  • As a result of the deliberations of the Sub-Committee of the FSDC held on August 16, 2011, two Technical Groups were set up – a Technical Group on Financial Inclusion and Financial Literacy and an Inter Regulatory Technical Group.
  • The Inter Regulatory Technical Group is chaired by an Executive Director of RBI and comprises of ED level representatives from the SEBI, IRDA and PFRDA.
  • The Group will meet once every two months.
  • It will discuss issues related to risks to systemic financial stability and inter regulatory coordination and will provide essential inputs for the meetings of the Sub-Committee.
  • The Technical Group on Financial Inclusion and Financial Literacy is headed by the Deputy Governor of RBI and comprises of representatives of all Regulators and Ministry of Finance.
  • In addition, an Inter-Regulatory Forum for Monitoring of Financial Conglomerates has also been set up under the aegies of FSDC.
  • FSDC also functions through working group and a macro financial monitoring group.