Amendment to the constitution of Financial Stability Development Council

## Policy Analysis Report: Amendment to F. No. 14332010EM Regarding the Financial Stability and Development Council **1. Executive Summary:** This report analyzes an amendment to the Government of India's notification F. No. 14332010EM, dated 30th December, 2010, concerning the Financial Stability and Development Council (FSDC). The amendment, issued on September 15, 2021, revises the composition of the FSDC by substituting the list of members outlined in para 2bi to para 2bxiii of the original notification. This change appears aimed at clarifying and updating the roles and titles of the individuals representing various key government and regulatory bodies within the FSDC. The key finding is a formal restructuring of the FSDC membership. **2. Introduction:** This report provides an informative analysis of an amendment to the Government of India, Ministry of Finance, Department of Economic Affairs' notification pertaining to the Financial Stability and Development Council (FSDC). The analysis is based solely on the provided text of the amendment published on September 15, 2021. **3. Policy Overview:** * **Original Policy:** The amendment refers to the original notification F. No. 14332010EM, dated 30th December, 2010. This report does not have the text of the original policy. * **Core Objective(s):** Based on the document title and the departments involved (Ministry of Finance, Department of Economic Affairs, Financial Stability Division), the core objective of the original policy (and the FSDC itself) is inferred to be the maintenance of financial stability and development within India. The amendment, specifically, seems geared towards refining the operational structure of the FSDC by clarifying its membership. **4. Background and Rationale:** This document amends the original policy (F. No. 14332010EM) by changing the composition of the FSDC. The amendment likely aims to ensure that the FSDC reflects the current structure and responsibilities of key governmental and regulatory bodies. It may also address any ambiguities or outdated titles within the original membership list, guaranteeing that the council is comprised of the most relevant and appropriately positioned individuals. The frequent past amendments suggest an ongoing effort to keep the FSDC's membership aligned with the evolving landscape of financial regulation and economic management. **5. Key Provisions / Changes:** This is an amendment to the existing policy. The key changes are: * **Specific Part Changed:** The amendment substitutes paras 2bi to 2bxiii of the original notification. * **New Rule/Provision:** The new provision is a list of positions now comprising the FSDC. These are: * Minister of State Finance, in charge of Department of Economic Affairs * Minister of State Finance in charge of Departments other than Department of Economic Affairs * Governor, Reserve Bank of India (RBI) * Secretary, Department of Economic Affairs * Secretary, Department of Revenue * Secretary, Department of Financial Services * Secretary, Department of Expenditure * Secretary, Ministry of Corporate Affairs * Secretary, Ministry of Electronics and Information Technology * Chief Economic Adviser, Ministry of Finance * Chairperson, Securities and Exchange Board of India (SEBI) * Chairperson, Insurance Regulatory and Development Authority of India (IRDAI) * Chairperson, Pension Fund Regulatory and Development Authority (PFRDA) * Chairperson, Insolvency and Bankruptcy Board of India (IBBI) * Chairperson, International Financial Services Centre Authority * **Difference/Effect of Change:** The substitution updates the specific individuals and/or positions that constitute the membership of the FSDC. This ensures the council is composed of representatives from the current relevant departments and regulatory bodies holding the specified positions. The intended effect is likely improved coordination and decision-making within the FSDC by ensuring the right expertise and authority are represented. The inclusion of the Chairperson, International Financial Services Centre Authority suggests increasing importance of this function in financial stability discussions. **6. Target Audience and Stakeholders:** The primary target audience is the FSDC itself, along with the various ministries, departments, and regulatory bodies whose representatives are now explicitly listed as members. Stakeholders include the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI), Pension Fund Regulatory and Development Authority (PFRDA), Insolvency and Bankruptcy Board of India (IBBI), International Financial Services Centre Authority, and the Department of Economic Affairs. More broadly, any financial institution supervised by these regulators is indirectly affected by changes to the FSDC composition. **7. Implementation Aspects (Inferred):** * **Responsible agency/bodies mentioned:** The Department of Economic Affairs, Ministry of Finance is the responsible agency. The listed members are responsible for participating in the FSDC. * **Timelines or procedures specified:** No specific timelines or procedures are outlined in the provided text, only the date of the amendment (September 15, 2021). * **Implementation aspects related specifically to the changes:** The amendment requires the relevant government departments and regulatory bodies to ensure their designated representatives participate in the FSDC meetings and activities according to the updated list. **8. Expected Outcomes / Impact of Changes:** The intended outcome of this amendment is improved effectiveness and coordination within the FSDC. By clarifying and updating the membership, the council is expected to benefit from the most current expertise and perspectives available across various government and regulatory functions. The inclusion of the Chairperson, International Financial Services Centre Authority suggests an increased focus on international financial activities and their impact on domestic financial stability. Ultimately, this should lead to more informed and effective decision-making concerning financial stability and development in India. **9. Conclusion:** The amendment to notification F. No. 14332010EM represents an effort to refine the composition of the Financial Stability and Development Council (FSDC). The updated membership list, substituting paras 2bi to 2bxiii of the original notification, is intended to enhance the council's effectiveness by ensuring that it comprises relevant representatives from key government departments and regulatory bodies. While the provided text offers limited context, the amendment appears to be a routine but important adjustment to maintain the FSDC's relevance and responsiveness to the evolving financial landscape.

Key Entities Referenced