FSDC evaluates financial stability and general economic condition

The Financial Stability and Development Council (FSDC) chaired by Finance Minister Pranab Mukherjee examined India’s general economic situation in the light of steep rate hike by RBI in its first quarter monetary policy review.

After the FSDC meeting, FSDC member and IRDA chairman J Hari Narayan said 'We have examined the financial stability situation, reviewed the trends and understood each other’s view points on the fundamentals of economy. By adding further he said, 'the major concerns were relationship between inflation and growth. We are confident that growth trend will continue.” The FSDC meeting was attended by all financial sector regulators.

On July 26, RBI hiked its repo (short term lending) rate and reverse repo (short term borrowing rate) by 50 basis points each, as a result repo and reverse repo rates increased to 8% and 7% respectively. 

The central bank, in its quarterly review of the monetary policy, has also revised its fiscal-end inflation projection to 7% from 6% earlier. However, the central bank has maintained its GDP forecast of India for current financial year at 8%. 

The Financial Stability and Development Council, is high level organization for coordination between different regulatory authorities and looks at financial sector development, financial literacy, financial inclusion and macro-prudential supervision of economy, including the performance of large financial firms