30th FSDC Meeting on Financial Stability and Development
Union Finance Minister Nirmala Sitharaman chaired the 30th Meeting of the Financial Stability and Development Council (FSDC) in New Delhi, which focused on assessing India's macro-financial stability amid rising global uncertainties. The council reviewed emerging risks from geopolitical tensions, the artificial intelligence boom, and the sharp increase in global bond yields, emphasizing the need for heightened vigilance and proactive measures to mitigate potential threats to India's financial stability.
Cybersecurity and Financial Sector Resilience
The council discussed the Financial Sector Cyber Security Strategy (FSCSS) formulated by an Inter-Ministerial Group comprising financial sector regulators and cybersecurity agencies in coordination with the Department of Economic Affairs, Department of Financial Services, and Ministry of Electronics and Information Technology. The implementation of FSCSS is expected to strengthen the overall resilience of the Indian financial sector, with specific focus on protecting Critical Information Infrastructure and enhancing cybersecurity preparedness of Regional Rural Banks (RRBs).
Fintech Innovation and Digital Transformation
The FSDC deliberated on promoting innovation in the Fintech sector, including exploring prospects for tokenization of financial assets and other real-world assets. The meeting addressed measures to strengthen the domestic investment ecosystem and improve resource flow for investment, particularly in GIFT-IFSC. Key discussions included simplification and digitalization of KYC processes and digital onboarding for Non-Resident Indians (NRIs) and Foreign Portfolio Investors (FPIs).
Financial Sector Reforms and Cost Reduction
The council discussed reforms to scale up Digital Public Infrastructures (DPIs) in India, specifically focusing on the Account Aggregator and Unified Lending Interface (ULI) framework with particular emphasis on MSMEs. Other agenda items included reducing the cost of intermediation in the financial sector, improving regulatory responsiveness, and rationalization of Credit Guarantee Schemes in India.
Unclaimed Assets and Regulatory Coordination
Finance Minister Sitharaman urged regulators and stakeholders to expedite the process of refunding unclaimed assets including bank deposits, dividends, shares, post office accounts, insurance, and pension funds to their rightful owners. The FSDC noted the success of the "Your Money, Your Right" campaign at the district level for refunding existing unclaimed financial assets and guided Ministries and Regulators to pursue additional efforts for timely refunds.
Given the rising geopolitical headwinds and global uncertainty, the Finance Minister recommended holding FSDC meetings at more frequent intervals with a predefined schedule. The council also reviewed activities undertaken by the FSDC Sub-Committee chaired by the RBI Governor and action taken on pending past decisions.
The meeting was attended by key financial regulators and government officials including RBI Governor Sanjay Malhotra, SEBI Chairperson Tuhin Kanta Pandey, IRDAI Chairperson Ajay Seth, IFSCA Chairperson K. Rajaraman, PFRDA Chairperson S. Ramann, IBBI Acting Chairperson Jayanti Prasad, and senior officials from various ministries including Economic Affairs, Financial Services, Revenue, Electronics and IT, and Corporate Affairs.