Indian financial system is well protected and regulated despite the daunting global financial situation, Economic Affairs Secretary Ajay Seth said on Monday. Briefing media on the meeting outcome of the 27th Financial Stability and Development Council (FSDC) headed by Finance Minister Nirmala Sitharaman, Seth said, “The Indian financial sector is well protected, well regulated but at the same time, we have to be cautious and be on our toes as soon as early warning indicators are there”.
There are a set of indicators which provide early warning indicators so that the stresses are noticed well in time to take the corrective measures, he said. Asked if the spillover of the failure of Silicon Valley Bank and Signature Bank and liquidity pressure faced by Credit Suisse was discussed, he said, it was not specifically brought but there’s no spillover coming. About the Government Securities (G-Sec) market, he said the effort is to have a seamless experience for potential with the use of technology.
“Whether they (potential investors) come through the RBI infrastructure… or the Sebi infrastructure route, hitherto which was not possible but today with the use of technology (it) is possible,” he noted. On the G-sec market, he said, “With the use of technology, how a seamless experience can be provided to potential investors, whether they come through the RBI infrastructure, which is the market infrastructure route, or the Sebi infrastructure route, hitherto which was not possible but today with the use of technology is possible”. So all stakeholders should work in a time-bound manner to create a seamless environment for investment, he added.
The council also deliberated on early warning indicators for the economy and our preparedness to deal with them, reducing the compliance burden on the regulated entities in the financial sector by improving regulatory quality, debt levels of corporates and households in India, simplification and streamlining of KYC framework to meet the needs of Digital India, he said. Besides, the seamless experience for retail investors in government securities, Bimakrit Bharat – Unique Value Proposition to take insurance to the last mile and support required in terms of resolving inter-regulatory issues for GIFT IFSC to play a strategic role in Atmanirbhar Bharat was also discussed.
The council also took note of the activities undertaken by the FSDC Sub-Committee chaired by the RBI Governor Shaktikanta Das and the action taken by members on the past decisions of the FSDC. Besides RBI governor, Securities and Exchange Board of India chairperson Madhabi Puri Buch, Insurance Regulatory and Development Authority of India (Irdai) chairman Debasish Panda, Insolvency and Bankruptcy Board of India (IBBI) chairman Ravi Mital and Pension Fund Regulatory and Development Authority’s newly appointed chairman Deepak Mohanty participated in the meeting.
According to sources, the FSDC meeting was also attended by Minister of State for Finance Pankaj Chaudhary and Bhagwat Kishanrao Karad, Finance Secretary T V Somanathan, Economic Affairs Secretary Ajay Seth, Revenue Secretary Sanjay Malhotra, Financial Services Secretary Vivek Joshi and other top officials of the finance ministry.