FSDC (Syllabus: GS Paper 3 – Economy)

News-CRUX-10     22nd February 2024        

Context: Union Minister for Finance and Corporate Affairs recently chaired the 28th Meeting of the Financial Stability and Development Council (FSDC) in New Delhi.

Financial Stability and Development Council (FSDC)

  • About: It is a non-statutory apex council under the Ministry of Finance constituted by the Executive Order in 2010.
  • Origins: The Raghuram Rajan Committee (2008) on financial sector reforms first proposed the creation of FSDC.
  • Composition: The Chairman of the Council is the Finance Minister and its members include the heads of financial sector Regulators (RBI, SEBI, PFRDA, IRDA & FMC) Finance Secretary and/or Secretary, Department of Economic Affairs, Secretary, Department of Financial Services, and Chief Economic Adviser.
  • Sub-committees and Roles: The FSDC Sub Committee is Chaired by the Governor of the RBI.
  • All the members of the FSDC are also members of the Sub-committee.
  • Objectives:

oTo strengthen and institutionalize the mechanism of maintaining financial and macroeconomic stability.

oTo enhance inter-regulatory coordination and promote financial sector development.

oIt also focuses on financial literacy and financial inclusion.

oCoordinating India’s international interface with financial sector bodies such as the Financial Action Task Force (FATF) and Financial Stability Board (FSB).


  • Strengthening Financial Stability: The mechanism aims to fortify financial stability within the system.

oIt seeks to mitigate risks and prevent crises through proactive measures.

  • Institutionalizing Coordination: It fosters collaboration among regulatory bodies to address systemic risks effectively.
  • Promoting Sector Development: The mechanism works towards the development of the financial sector.