The FSDC has been criticised as an infrequent, non-statutory forum. Examine its role in macro-prudential governance and suggest reforms to institutionalise inter-regulatory coordination.

The Financial Stability and Development Council (FSDC) was set up by a government notification on 30 December 2010 [2]. The Union Finance Minister chairs it, and it is India's top forum for macro-prudential oversight. Its 30th meeting on 23 October 2026 showed both how useful the Council is and how weak its institutional base remains [1].

Role in macro-prudential governance

• Watching for systemic risk: the Council reviewed geopolitical uncertainty, the AI boom and rising global bond yields [1].
• Coordinating regulators: RBI, SEBI, IRDAI, PFRDA, IFSCA and IBBI met at one table with MeitY and CERT-In [1].
• Cyber resilience: it noted the Financial Sector Cyber Security Strategy and reviewed how prepared Regional Rural Banks (RRBs) are against cyber attacks [1].
• Daily work: the FSDC Sub-Committee, chaired by the RBI Governor, carries on monitoring between Council meetings [1].
• Development and inclusion: simpler KYC, Account Aggregator and ULI for MSME credit, and refunds of unclaimed assets [1].

Why the criticism holds

• Infrequent: about 16 months passed between the 28th (Feb 2024), 29th (Jun 2025) and 30th (Oct 2026) meetings [3][4][1].
• Non-statutory: the Council rests on a notification [2], so no law fixes how often it meets, its quorum or what it must disclose. The FM's own call for a "predefined schedule" admits this gap [1].
• Slow follow-through: the cyber strategy was only "noted", and the Council had to review pending decisions again [1].
• Mandate tension: stability and development can pull against each other. The IMF has asked India to make financial stability the FSDC's priority [6].
• Counterpoint: having the FM as chair is a strength. Only the FM can bring ministries together on cross-cutting risks like cyber attacks [1].

Reforms to institutionalise coordination

• Legal backing: follow the FSLRC (2013) proposal for a statutory FSDC that leads on systemic risk [5]. The law should fix meeting frequency, duties and a public annual report.
• Shared data: build one centralised systemic-risk dashboard across all regulators [6].
• Counter-cyclical tools: start building the counter-cyclical capital buffer, which is currently zero [6].
• Cross-sector drills: run joint cyber crisis simulations that include RRBs [6].
• Accountability: publish action-taken reports after each meeting.

The FSDC has become India's main platform for spotting risks that cut across sectors, but it still depends on ministerial discretion. A statutory mandate, shared data and a fixed calendar would turn this occasional forum into a permanent safeguard. That would put the FSLRC's vision into practice and strengthen confidence in India's financial system.