Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman chaired the 23rd Meeting of the Financial Stability and Development Council (FSDC) through video conference here today.

The meeting was also virtually attended by Shri Anurag Singh Thakur, Union Minister of State for Finance & Corporate Affairs; Dr Ajay Bhushan Pandey, Finance Secretary; Shri Ajay Prakash Sawhney, Secretary, Ministry of Electronics and Information Technology; Shri Debasish Panda, Secretary, Department of Financial Services; Shri Tuhin Kanta Pandey, Secretary (In charge), Ministry of Corporate Affairs; Shri Tarun Bajaj, Secretary, Department of Economic Affairs; Shri Shaktikanta Das, Governor, Reserve Bank of India; Dr. Krishnamurthy V. Subramanian, Chief Economic Adviser; Shri Ajay Tyagi, Chairperson, Securities and Exchange Board of India; Shri Subhash Chandra Khuntia, Chairperson, Insurance Regulatory and Development Authority of India; Shri Supratim Bandyopadhyay, Chairperson, Pension Fund Regulatory and Development Authority; Dr. M.S. Sahoo, Chairperson, Insolvency and Bankruptcy Board of India and Shri Injeti Srinivas, Chairman International Financial Services Centres Authority and other senior officers of the Government of India and Financial Sector Regulators.

The meeting reviewed the major macroeconomic developments and Financial Stability issues (global and domestic) with special reference to vulnerability related issues and noted that the policy measures taken by the Government of India and the financial sector regulatory authorities have ensured faster economic recovery in India as reflected in the reduced contraction of GDP in Q2 of 2020-21. The economy has gained momentum and the path to recovery will be faster than what was predicted earlier.  The discussions were held on further measures which may be required to be taken to ensure consistent support of the financial sector for achieving faster real economic growth and achieving the overall macroeconomic targets, while continuing to maintain financial stability.  The Council also discussed the budget proposals submitted by RBI and other Regulators.

It was noted that there is a need to keep a continuous vigil by the Government and all regulators on the financial conditions that could expose financial vulnerabilities in the medium and long-term.

The Council discussed the challenges involved in smooth transition of London Interbank Offer Rate (LIBOR) based contracts and noted that a multipronged strategy involving relevant stakeholder institutions and departments is required in this regard.

The Council also took note of the activities undertaken by the FSDC Sub-Committee chaired by the Governor of RBI and the action taken by members on FSDC decisions earlier.

Financial stability oversight: coordinated regulatory vigilance and measures to support faster economic recovery and manage LIBOR transition. The Council reviewed macroeconomic developments and financial stability risks, noted that policy measures by government and regulators have supported faster recovery, and considered further coordinated measures to ensure consistent financial-sector support for real economic growth while maintaining stability. It emphasised continuous vigilance on medium- and long-term vulnerabilities, discussed a multipronged strategy for LIBOR contract transition, and took note of FSDC Sub-Committee activities and member actions on prior decisions.