Finance Minister Nirmala Sitharaman to review the state of the economy at the FSDC meeting on May 8

Union Finance Minister Nirmala Sitharaman. , Photo Credit: ANI

Finance Minister Nirmala Sitharaman will review the state of the economy amid global and domestic challenges at the Financial Stability and Development Council (FSDC) meeting on 8 May.

Sources said all financial sector regulators, including RBI Governor Shaktikanta Das, will participate in the 27th meeting of the high-level committee to be held here.

This will be the first meeting of FSDC after the passage of Rs 45 lakh crore budget for 2023-24 with more emphasis on capital expenditure with an outlay of Rs 10,00,961 crore.

FSDC is the apex body of regional regulators headed by the Union Finance Minister.

The meeting will review the current global and domestic economic situation and financial stability issues relating to banking and NBFCs in the wake of the failure of Silicon Valley Bank and Signature Bank and the liquidity pressure faced by Credit Suisse.

He said that the Council will review the progress of previously approved measures to achieve inclusive economic growth with further development of the financial sector and macroeconomic stability.

In its latest bi-monthly policy, RBI slightly revised the economic growth forecast for the current fiscal to 6.5% from the earlier estimate of 6.4%.

While unveiling the first bi-monthly monetary policy for FY 2023-24 in April, the RBI governor had said that GDP growth in the first quarter of 2023-24 is expected to be 7.8%.

The second, third and fourth quarters of the current financial year are estimated to grow at 6.2%, 6.1% and 5.9%, respectively.

The last meeting of the High Level Panel was held in September, 2022.

During the last meeting, the Council deliberated on governance and management issues in systemically important financial institutions, including early warning indicators for the economy and preparedness to deal with them, improving the efficiency of existing financial/credit information systems and financial market infrastructure , and strengthening the cyber security framework in the financial sector.

Also, common KYC for all financial services and related matters, updates on account aggregators and next steps, issues related to power sector financing, strategic role of GIFT IFSC in new self-reliant India, GIFT-IFSC inter-regulatory issues, and The need for utilizing the services of registered valuers by all government departments was also discussed.

The FSDC meeting will also review the activities carried out by the FSDC sub-committee headed by the RBI Governor and the action taken by the members on the previous decisions of the FSDC.

Besides the RBI governor, Madhabi Puri Buch, chairperson of the Securities and Exchange Board of India, Debashish Panda, chairman of the Insurance Regulatory and Development Authority of India (IRDAI), Ravi Mittal, chairman of the Insolvency and Bankruptcy Board of India (IBBI) and pension fund regulator and Chairman Deepak Mohanty will attend the newly appointed meeting of Development Authority.

Sources said the FSDC meeting will also be attended by Minister of State for Finance Bhagwat Kishanrao Karad, Finance Secretary TV Somanathan, Economic Affairs Secretary Ajay Seth, Revenue Secretary Sanjay Malhotra, Financial Services Secretary Vivek Joshi and other top officials of the Finance Ministry.