With reference to ‘Financial Stability and Development Council’, consider the following statements:

1. It is an organ of NITI Aayog.
2. It is headed by the Union Finance Minister
3. It monitors macro-prudential supervision of the economy.

Which of the statements given above is/ are correct?

[UPSC Civil Services Exam – 2016 Prelims]

(a) 1 and 2 only

(b) 3 only6

(c) 2 and 3 only

(d) 1, 2 and 3

Answer: (c)        

Explanation:

• The Financial Stability and Development Council (FSDC) is an apex-level forum established by the Government of India. Contrary to Statement 1, it was actually formed in December 2010, which was after the establishment of NITI Aayog.
• Statement 2 is correct, as the Chairman of the FSDC is indeed the finance minister. This position holds the responsibility of leading the council and its activities.
• The primary role of the FSDC is to function as a coordination agency between different financial sector regulators in India, such as the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDA), and the Pension Fund Regulatory and Development Authority (PFRDA). It facilitates cooperation and collaboration among these regulatory bodies for the stability and development of the financial sector.
• It also addresses inter-regulatory coordination and financial sector development issues. Hence statement 3 is correct.