It is an apex-level body constituted by the government of India.
Recommendations for such a super regulatory body were first mooted by the Raghuram Rajan Committee in 2008. Finally in 2010, the then Finance Minister of India, Pranab Mukherjee, decided to set up such an autonomous body dealing with macro prudential and financial regularities in the entire financial sector of India.
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. It is not a statutory body.
Chairperson: The Union Finance Minister of India
Members: Heads of the financial sector regulatory authorities (i.e., RBI, SEBI, IRDA, and PFRDA), Finance Secretary and/or Secretary, Department of Economic Affairs (Union Finance Ministry), Secretary, Department of Financial Services, and Chief Economic Adviser. FSDC can invite experts to its meeting if required.
The objectives of FSDC would be to deal with issues relating to:
• Financial stability
• Financial sector development
• Inter-regulatory coordination
• Financial literacy
• Financial inclusion
• Macro prudential supervision of the economy including the functioning of large financial conglomerates.
• Coordinating India’s international interface with financial sector bodies such as the Financial Action Task Force (FATF) and Financial Stability Board (FSB).
Functions: To strengthen and institutionalise the mechanism of maintaining financial stability, Financial Literacy, Financial Inclusion, financial sector development, inter-regulatory coordination along with monitoring macro-prudential regulation of economy. FSDC was formed to bring greater coordination among financial market regulators.
The FSDC Sub Committee Chaired by the Governor of the RBI. All the members of the FSDC are also the members of the Sub-committee. Additionally, all four Deputy Governors of the RBI and Additional Secretary, DEA, in charge of FSDC, are also members of the Sub Committee. The Council/Sub-committee deliberates on these issues and suggests taking appropriate steps, as required.
FSDC was formed to bring greater coordination among financial market regulators. The council is headed by the finance minister and has the Reserve Bank of India (RBI) governor and chairpersons of the Securities and Exchange Board of India, Insurance Regulatory and Development Authority and Pension Fund Regulatory and Development Authority as other members along with finance ministry officials.