New York: Union finance minister Pranab Mukherjee has said that the proposed high-level Financial Stability and Development Council (FSDC) would be established soon but would not dilute the autonomy of individual regulators.
“We hope to institutionalize these arrangements (FSDC) very soon,” he said while addressing the seventh India Investment Forum meeting in New York on Wednesday.
Without prejudice to the autonomy of regulators, Mukherjee said, this Council would monitor macro prudential supervision of the economy, including the functioning of large financial conglomerates, and address inter-regulatory coordination issues.
It will also focus on financial literacy and financial inclusion, he said.
“We have also decided to set-up a Financial Sector Legislative Reforms Commission (FSLRC) to rewrite and clean up the financial sector laws and bring them in line with the requirements of the sector,” he said.
India decided to setup FSDC, with a view to strengthen and institutionalize the mechanism for maintaining financial stability, he said.
It is to be noted that Reserve Bank of India (RBI) has already raised concerns about the dilution of its autonomy.
The finance minister noted that the one of the major fallouts of the global crisis has been the conscious attempts by all governments to take a critical look at the architecture and operative components of their financial systems with an eye on ensuring financial stability.
“There is no one-size-fits-all approach in this and while the broad principles can be agreed upon, the exact nature of reforms have to be very specific,” he said.