Take appropriate and timely action: FM tells regulators

Finance and Corporate Affairs Minister Nirmala Sitharaman has advised financial regulators that they should maintain a constant vigil as ensuring “financial sector stability is a shared responsibility.” They must take appropriate and timely action to mitigate any vulnerability and strengthen financial stability.

She was chairing the 27th Meeting of the Financial Stability and Development Council (FSDC) in New Delhi yesterday for the first time after the announcement of Budget 2023-24, said an official press release.

Regulators should adopt a focused approach to reduce the compliance burden further and ensure a streamlined and efficient regulatory environment, the Finance Minister said, adding that she would review the progress made by each regulator in June 2023.

The regulators need to be proactive and ensure cyber-security preparedness of the information technology systems to reduce the risk of cyber-attacks, protect sensitive financial data, and maintain overall system integrity, thus safeguarding the stability and resilience of the Indian financial ecosystem, she said.

Regulators should conduct a special drive to facilitate the settlement of unclaimed deposits and claims in the financial sector across all segments, such as banking deposits, shares and dividends, mutual funds, insurance, etc., Sitharaman said.

The FSDC meeting was attended by Union Ministers of State for Finance Pankaj Chaudhary and Bhagwat Kishanrao Karad, Reserve Bank of India Governor Shaktikanta Das, Securities and Exchange Board of India (Sebi) Chairperson Madhabi Puri Buch, Insurance Regulatory and Development Authority of India Chairperson Debasish Panda, Pension Fund Regulatory and Development Authority Chairperson Deepak Mohanty, Insolvency and Bankruptcy Board of India Chairperson Ravi Mital, and International Financial Services Centres Authority Chairperson Injeti Srinivas.

Top government officials who attended the meeting included Finance Secretary T.V. Somanathan, Economic Affairs Secretary Ajay Seth, Financial Services Secretary Vivek Joshi, Revenue Secretary Sanjay Malhotra, and Corporate Affairs Secretary Manoj Govil.

The FSDC deliberated on, among other things, early warning indicators for the economy and our preparedness to deal with them, reducing compliance burden on the regulated entities, debt levels of corporations and households, simplification and streamlining of the KYC framework to meet the needs of Digital India, seamless experience for retail investors in government securities, etc.