Financial Stability Development Council likely to be in place by December

The Financial Stability Development Council (FSDC), which is seen as a finance sector super regulator, is expected to be in place by December 2010.

The ministry of finance has completed consultation of all the financial sector regulators on the formation of the council, minister of state for finance Namo Narain Meena informed the Rajya Sabha in a written reply.

The FSDC will deal with issues relating to financial stability, financial sector development, inter-regulatory coordination, financial literacy, financial inclusion, macro prudential supervision of the economy, including the functioning of large financial conglomerates as also coordination of India's international interface with financial sector bodies such as the Financial Action Task Force (FATF) and Financial Stability Board (FSB).

Finance minister Pranab Mukherjee had, last week, allayed fears that the FSDC would end up as a super regulator even as it would help sort out inter-regulatory issues.

"FSDC will be set up shortly and it will be put in operation quickly because it is administrative measure. One apprehension about FSDC is that it is going to play the role of a super regulator, but it is not like that," he said at the HT Leadership Summit in New Delhi.

Mukherjee said the FSDC would have no statutory provisions as an executive body.

Earlier, the Reserve bank governor had expressed certain reservations over the proposed FSDC, which would be chaired by the finance minister.

The finance ministry has since decided to make RBI governor head of a sub-committee of the proposed FSDC. Other financial sector regulators like SEBI, PFRDA and IRDA would be members of FSDC.