The government will set up the Financial Stability and Development Council, an apex body to bring about more coordination among various regulators for speedy action in times of crisis, by April end.
The structure of the Council, which was announced by Finance Minister Pranab Mukherjee in his Budget speech, will be finalised soon and the body will be set up in a month's time, a top finance ministry official told PTI.
There is a thinking that the panel, which would comprise all the financial regulators should be headed by the Finance Minister, he added.
"With a view to strengthen and institutionalise the mechanism for maintaining financial stability, government has decided to setup an apex-level FSDC," Mukherjee in his Budget speech said, adding the financial crisis of 2008-09 has fundamentally changed the structure of banking and financial markets the world over.
The FSDC, the minister had clarified would not infringe on the working of the existing financial sector regulators which includes the Reserve Bank of India, Securities and Exchange Board of India and the Insurance and Regulatory Development Authority.
"Without prejudice to the autonomy of regulators, this Council would monitor macro prudential supervision of the economy, including the functioning of large financial conglomerates and address inter-regulatory coordination issues," he had said.
Besides other things, the Council will also focus on financial literacy and financial inclusion, the Finance Minister had said.
The role of the high-level panel, the finance ministry official said, would be to give institutions a heads up on alarming financial trends so that necessary precautionary steps can be taken well in advance.
Since the Council is likely to be headed by Finance Minister, its secretariat would be based in New Delhi.
At the same time, the official clarified, the new body will not replace the existing High Level Co-ordination Committee (HLCC) on financial and capital markets, which meets regularly to consider issues of common interest.
Heads of the Reserve Bank of India, Securities Exchange Board of India, Insurance Regulatory and Development Authority and Pension Fund Regulatory and Development Authority will be members of the proposed council.
The panel would collect data from all the financial regulator and study them on regular basis, the official said, adding, if it comes across alarming trends it would suggest corrective steps.
