New Delhi: The Financial Stability and Development Council (FSDC), at a meeting chaired by Finance Minister Nirmala Sitharaman here on Friday, deliberated on strengthening the country’s domestic investment ecosystem, enhancing capital flows, and deepening financial sector reforms.
The FSDC took cognisance of the emerging trends from domestic and global macro-financial situations and stressed the need to be vigilant, especially in view of the ongoing geopolitical uncertainties, AI boom, and steep rise in global bond yields.
It recognised the need for proactive efforts to mitigate potential risks to financial stability while adopting adequate safeguards for the financial system’s resilience. The members decided to strengthen the inter-regulatory coordination for wider development of the financial sector, according to a statement issued after the meeting.
Given rising geopolitical headwinds and global uncertainty, Finance Minister Sitharaman urged the Council to hold its meetings at more frequent intervals with a predefined schedule.
Considering the importance of regulatory improvisation and digital modernisation in the financial sector, it discussed measures towards promoting innovation in the Fintech sector and exploring the prospects of tokenisation of financial assets and other real-world assets.
The Council reviewed the cyber resilience of the Indian financial sector and took note of the Financial Sector Cyber Security Strategy (FSCSS) formulated by an Inter-Ministerial Group (IMG) comprising financial sector regulators and cybersecurity agencies, in coordination with the Finance Ministry and the Ministry of Electronics and Information Technology (MeitY). The implementation of the FSCSS is expected to strengthen the overall resilience of the Indian financial sector. The discussions also covered India’s preparedness to protect the Critical Information Infrastructure and the resilience of protection systems, and improving cybersecurity preparedness of Regional Rural Banks (RRBs), the statement said.
The FSDC also discussed issues relating to formulating a strategy for implementing the past decisions and the budget announcements, which include strengthening the domestic investment ecosystem and improving resource flow for investment, including in the GIFT-IFSC, the simplification and digitalisation of the KYC processes, and digital onboarding for NRIs and FPIs.
Reforms to scale up DPIs in India, including the Account Aggregator and Unified Lending Interface (ULI) framework with specific focus on MSMEs; reducing cost of intermediation in the financial sector, improving the responsiveness of regulations and rationalisation of Credit Guarantee Schemes in India were other issues that were taken up for discussion, the statement added.
The Union Finance Minister also urged the regulators and stakeholders concerned to expedite the process of refund of unclaimed assets (bank deposits, dividends, shares, post office accounts, insurance and pension funds etc.) to their rightful owners.
The FSDC noted the success undertaken by stakeholders under the “Your Money, Your Right” campaign at the district level to refund the existing unclaimed financial assets and guided Ministries and Regulators to pursue additional efforts for timely refund to rightful owners.
The meeting was attended by RBI Governor Sanjay Malhotra, Secretaries in the Finance Ministry, MeitY Secretary S. Krishnan, SEBI chief Tuhin Kanta Pandey and Indian Computer Emergency Response Team (CERT-In) Director General Sanjay Bahl.
–IANS–
