Union Minister for Finance and Corporate Affairs Nirmala Sitharaman on Friday chaired the 30th meeting of the Financial Stability and Development Council (FSDC) in New Delhi, where members reviewed macro-financial stability, cybersecurity preparedness, financial sector reforms and emerging risks from global economic and geopolitical developments.
The Council also discussed measures to promote fintech innovation, explore the tokenisation of financial and other real-world assets, strengthen investment flows and expedite the refund of unclaimed financial assets to their rightful owners, according to a press release by the Ministry of Finance.
FSDC Assesses Financial Stability and Emerging Risks
The Council reviewed domestic and global macro-financial developments, emphasising the need for vigilance amid geopolitical uncertainties, the artificial intelligence (AI) boom and a sharp rise in global bond yields. Members stressed the importance of proactively mitigating potential risks and maintaining safeguards to ensure the resilience of India’s financial system.
Recognising the importance of regulatory improvements and digital modernisation, the FSDC discussed measures to encourage innovation in the fintech sector and explore the potential of tokenisation of financial assets and other real-world assets.
The Council also decided to strengthen coordination among financial sector regulators to support the sector’s broader development.
Cybersecurity Preparedness of Financial Sector Reviewed
The FSDC took note of the Financial Sector Cyber Security Strategy (FSCSS), formulated by an Inter-Ministerial Group comprising financial sector regulators and cybersecurity agencies in coordination with the Department of Economic Affairs (DEA), Department of Financial Services (DFS) and Ministry of Electronics and Information Technology (MeitY).
Implementation of the strategy is expected to strengthen the overall cyber resilience of India’s financial sector. Discussions also covered preparedness to protect Critical Information Infrastructure, improve the resilience of protection systems and enhance cybersecurity readiness among Regional Rural Banks (RRBs).
Council Discusses Investment, Digital Infrastructure and Regulatory Reforms
The FSDC discussed strategies to implement earlier decisions and Budget announcements aimed at strengthening the domestic investment ecosystem and improving resource flows, including through GIFT-IFSC.
The discussions covered simplifying and digitising Know Your Customer (KYC) processes and digital onboarding for Non-Resident Indians (NRIs) and Foreign Portfolio Investors (FPIs).
Members also considered reforms to scale up Digital Public Infrastructure (DPI), including the Account Aggregator framework and Unified Lending Interface (ULI), with a particular focus on micro, small and medium enterprises (MSMEs). Other priorities included reducing the cost of financial intermediation, improving regulatory responsiveness and rationalising credit guarantee schemes.
Sitharaman Calls for Faster Refund of Unclaimed Financial Assets
The Finance Minister urged regulators and other stakeholders to expedite the refund of unclaimed financial assets to their rightful owners. These include bank deposits, dividends, shares, post office accounts, insurance proceeds and pension funds.
The Council took note of stakeholder efforts under the “Your Money, Your Right” campaign at the district level to facilitate the return of unclaimed assets. It urged ministries and regulators to intensify efforts to ensure timely refunds.
Finance Minister Calls for More Frequent FSDC Meetings
In view of rising geopolitical challenges and global uncertainty, Sitharaman urged the Council to meet more frequently according to a predefined schedule.
The FSDC also reviewed the activities of its Sub-Committee, chaired by the Governor of the Reserve Bank of India (RBI), and took note of action taken on pending decisions from previous Council meetings.
Senior Financial Sector Officials Attend Meeting
The meeting was attended by RBI Governor Sanjay Malhotra; Anuradha Thakur, Secretary, Department of Economic Affairs; Sanjay Lohiya, Secretary, Department of Financial Services; Arvind Shrivastava, Secretary, Department of Revenue; S. Krishnan, Secretary, MeitY; and Dr. Pallavi Jain Govil, Secretary, Ministry of Corporate Affairs and other officials.
-PIB Inputs
