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 macroprudential supervision of the economy.

Which of the statements given above is/are correct?

1. 1 and 2 only
2. 3 only
3. 2 and 3 only
4. 1, 2 and 3

Explanation

Statement 1 is incorrect

• It is a non-statutory apex council under the Ministry of Finance. It was constituted by the Executive Order in 2010. The Raghuram Rajan committee (2008) on financial sector reforms first proposed the creation of FSDC.

Statements 2 and 3 are correct

• Chairman: Finance Minister.
• Its members include:
  • The heads of all Financial Sector Regulators (RBI, SEBI, PFRDA & IRDA).
  • The Finance Secretary.
  • The Secretary of the Department of Economic Affairs (DEA).
  • The Secretary of the Department of Financial Services (DFS).
  • Chief Economic Adviser.
  • Minister of State responsible for the Department of Economic Affairs (DEA).
  • The Secretary of the Department of Electronics and Information Technology.
  • The Chairperson of the Insolvency and Bankruptcy Board of India (IBBI).
  • The Revenue Secretary.
• FSDC sub-committee is headed by the Governor of RBI.
• The Council can invite experts to its meeting if required.
• The Council deals, inter-alia, with issues relating to financial stability, financial sector development, inter–regulatory coordination, financial literacy, financial inclusion and macro prudential supervision of the economy including the functioning of large financial conglomerates.

Answer: (c) 2 and 3 only; Difficulty Level: Hard