New Delhi: Finance Minister Nirmala Sitharaman on Thursday reviewed the state of the economy, including stress in the financial sector, at the meeting of the Financial Stability and Development Council (FSDC). The FSDC is the apex body of sectoral regulators, headed by the finance minister.
The 21st meeting of FSDC comes against the backdrop of the economy hitting a six-year low growth rate of 5% in the first quarter of 2019-20. Even some of the macroeconomic data for the second quarter does not portray an encouraging picture of the economy.
Industrial output growth in August contracted by 1.1%, after a gap of 26 months, reinforcing fears of a slowing economy and deteriorating consumer sentiment.
The output of eight core infrastructure industries contracted by 5.2% in September, indicating the severity of the economic slowdown. "Broadly overall macro-economic issues and the state of the economy were discussed in details.
There were some inter-regulatory issues which were also discussed. We also discussed about cybersecurity issues that were one important component of the discussion," Reserve Bank of India (RBI) Governor Shaktikanta Das told reporters after the meeting.
Going forward what kind of approach the regulators take on various issues particularly where there is inter-regulatory overlap were discussed, he said.
The current status of the NBFCs was also discussed, the RBI Governor said, adding, there are a large number of NBFCs that are functioning well.
"Even today, we have quite a good number of NBFCs, a large number of NBFCs which are well-functioning, which are able to access funds from the market which are able to access loans from the banks, and in fact, some of them have got overseas funding also," he said. The RBI is very closely monitoring the top 50 NBFCs.
"We are having regular interaction with the management of those NBFCs where we see any signs of vulnerability and whenever there is any vulnerable signs are visible, we are asking the management of the company to meet RBI and we asked them to take corrective steps through market mechanisms," he said.