Finance Minister Pranab Mukherjee on Tuesday met financial sector regulators to thrash out a broad framework of the proposed Financial Stability and Development Council (FSDC) — a council to deal with inter-regulatory issues. The council would also be involved in prudential supervision of the economy.
Reserve Bank of India (RBI) Governor D. Subbarao will head the sub-committee of FSDC, a finance ministry statement said.
The decision to make the RBI governor head of the sub-committee, which will also look at inter-regulatory issues, comes in the wake of the RBI expressing apprehensions over breach of regulators’ autonomy by the proposed council.
The new council, to be headed by the finance minister, is likely to be ready in two months.
Finance Secretary Ashok Chawla, Reserve Bank of India Governor D Subbarao, Securities and Exchange Board of India (SEBI) Chairman C B Bhave attended the meeting.
“It was very constructive, We gave our suggestion and he (the minister) said he will consider them and the finance ministry will respond,” Subbarao said after the meeting.
Insurance Regulatory and Development Authority (IRDA) Chairman J. Hari Narayan and Pension Fund Regulatory and Development Authority (PFRDA) Chairman Yogesh Agarwal were also present.
The finance ministry has already received suggestions from regulators on the new council. “Today the finance minster held a meeting to discuss our reaction on the discussion paper,” Subbarao said.