statesman news service
NEW DELHI, 3 JUNE: The Financial Stability and Development Council (FSDC) has expressed optimism that despite the concerns about some deterioration in asset quality, largely due to global and domestic economic conditions, the strong capital adequacy of banks would enable the banking system to withstand stress.
The FSDC held its seventh meeting here today under the chairmanship of the Union finance minister, Mr P Chidambaram, and reviewed the position of asset quality and capital adequacy of the banking system in the country. It also examined the national strategy for financial education and the recommendations of the financial sector legislative reforms commission.
The council noted with concern the significant increase in gold imports in recent months. It also reviewed the progress made in a key priority area for the financial market, i.e. development of a vibrant corporate bond market, taken up in the fifth meeting of the FSDC.
It noted that a number of steps had been taken in this regard on agreed lines by the member organisations and requested departments/organisations concerned to expedite remaining steps.
The recent initiatives taken by the government and the RBI to monitor credit quality of the banking system were discussed. In addition, an assessment of additional capital requirements for Indian banks under Basel III was deliberated upon.
The council took note of the recommendations of the Financial Sector Legislative Reforms Commission (FSLRC), which submitted its report to the government in March.