Recently, the Finance Ministry has chaired a meeting of the Financial Stability and Development Council (FSDC), which reviewed the state of the economy, including stress in the financial sector.

The 21st meeting of FSDC comes against the backdrop of the economy hitting a six-year low growth rate of 5 per cent in the first quarter of fiscal 2019-20.

What discussed under the meeting held?

  • Overall macroeconomic issues and the state of the economy were discussed in detail. 

  • There were some inter-regulatory issues that were also discussed. 

  • They also discussed cybersecurity issues that were one important component of the discussion.

  • The current status of the NBFCs was also discussed.


  • RBI Governor has said that the government was looking into making specific legislative amendments to address inter-regulatory issues, including to the Multi-State Cooperative Societies Act, 2002.

  • For better regulatory mechanisms, the government will put forward the discussed points in consultation with the RBI.

  • They urged for the need of amending the relevant Act that governs the multi-State cooperative societies.

Status of NBFCs:

  • The RBI governor has said that there were many NBFCs that were performing well.

  • There are some good NBFCs that are well-functioning, which are able to access funds from the market and loans from the banks, and in fact some of them have got overseas funding also.

  • RBI was monitoring the top 50 NBFCs, which represented roughly 75% of the asset size of the NBFC sector, and held regular interactions with them. 

Financial Stability and Development Council (FSDC):

  • The FSDC is the apex body (non-statutory) of financial sector regulators, headed by the Finance Minister. 

  • It was constituted in December 2010 in order to strengthen and institutionalize the mechanism for maintaining financial stability, enhancing inter-regulatory coordination and promoting financial sector development.

  • The Council deals with issues relating to financial stability, financial sector development, inter–regulatory coordination, financial literacy, financial inclusion and macro-prudential supervision of the economy.

  • The Council reviewed the current global and domestic macroeconomic situation and financial stability and vulnerabilities issues, including those concerning NBFCs and credit rating agencies (CRAs)