The Financial Stability and Development Council (FSDC) on Tuesday discussed the need for taking necessary steps to reduce unclaimed assets and expediting refunds, simplification and digitalisation of the KYC process, and increasing investment ratio, among others.
The 29th meeting of FSDC, which was held in Mumbai and chaired by Nirmala Sitharaman, Union Minister for Finance and Corporate Affairs, deliberated on strategy for taking necessary steps to reduce unclaimed assets in the financial sector (banks deposits, dividends, shares, post office accounts, insurance and pension funds etc.) and the expeditious and seamless refund of such assets to rightful owners.
Sitharaman urged the regulators and departments to expedite the process to refund the unclaimed amounts to the rightful owners by holding special district level camps.
This drive is to be conducted in coordination with RBI, SEBI, MCA, PFRDA and IRDA along with banks, pension agencies, insurance companies etc.
The unclaimed amounts comprise of deposits in banks, unclaimed shares and dividends are managed by IEPFA (Investor Education Protection Fund Authority), and unclaimed insurance and pension funds are with IRDAI and PFRDA.
The Finance Minister emphasised that the interest of common citizens has to be kept in mind and therefore expeditiously refund the claims of the rightful claimants.
Digital KYC
Further, the need to prescribe common KYC (know-your-customer) norms, simplification and digitalisation of the KYC process, including digital onboarding for Non-Resident Indians (including PIOs and OCIs), in the Indian securities market were also discussed.
Sitharaman exhorted the Council to take proactive steps to ensure that citizens should have a seamless experience with respect to KYC processes across the financial sector.
The Council also analysed trends in financing flows as part of the strategy to increase the investment ratio.
Further, the need for taking measures to improve the reach and scope of factoring services and effective use of account aggregator networks was also discussed.
The FSDC also discussed issues relating to formulating a strategy for establishing appropriate framework by regulators for evaluating and enhancing responsiveness of regulations and subsidiary instructions.
The Council deliberated on issues related to macro financial stability and India’s preparedness to deal with them.
In light of the analysis of cybersecurity regulations, sectoral preparedness, and the recommendations of Financial Sector Assessment Programme (FSAP) 2024-25, the FSDC considered strengthening the cyber resilience framework of the Indian financial sector through a financial sector-specific cybersecurity strategy.
The FSDC, according to a finance ministry statement, deliberated on the emerging trends from domestic and global macro-financial situation and stressed upon the need to be vigilant.
The Council recognised the need for proactive efforts to mitigate potential risks to financial stability while adopting adequate safeguards for financial system’s resilience. The members decided to strengthen the inter-regulatory coordination for wider development of the financial sector.
The Council was set up by the Centre as the apex level forum in December 2010 to strengthen and institutionalise the mechanism for maintaining financial stability, enhancing inter-regulatory coordination and promoting financial sector development.
The Chairman of the Council is the Finance Minister and its members include the heads of financial sector Regulators (RBI, SEBI, PFRDA, IRDA) Finance Secretary and/or Secretary, Department of Economic Affairs, Secretary, Department of Financial Services, and Chief Economic Adviser.
