Financial Stability and Development Council MCQs with Explanations
The Financial Stability and Development Council coordinates financial sector regulators, promotes financial stability and strengthens the financial system of India.
Correct Answer:
(B) The Finance Minister of India
It is chaired by the Union Finance Minister and includes the heads of financial sector regulators such as the RBI, SEBI, Insurance Regulatory and Development Authority of India (IRDAI), and Pension Fund Regulatory and Development Authority (PFRDA) and Chief Economic Adviser (CEA) among others.
Ques: 2
The primary objective of the FSDC is to:
Correct Answer:
(C) Maintain financial stability and enhance inter-regulatory coordination
The primary objective of the Financial Stability and Development Council (FSDC) is to ensure the stability of the Indian financial system and to promote its development by enhancing inter-regulatory coordination and implementing macro-prudential supervision. The FSDC also aims to monitor and address potential risks to financial stability, including those arising from global events, cyber threats, and climate change.
Ques: 3
Which of the following is NOT a member of the FSDC?
Correct Answer:
(D)
The Chief Minister of a state
Key Members of the FSDC:
Chairman: Union Finance Minister
Members:
Heads of financial sector regulators (e.g., RBI, SEBI, IRDAI, PFRDA, IBBI, IFSCA)
Finance Secretary and/or Secretary, Department of Economic Affairs
Secretary, Department of Financial Services
Chief Economic Adviser
Secretary, Ministry of Corporate Affairs
Secretary, Ministry of Electronics and Information Technology
Secretary, Department of Revenue
Ques: 4
The FSDC was established in India in:
Correct Answer:
(B) 2010
The Financial Stability and Development Council (FSDC) was indeed established in India in December 2010. According to the Financial Stability and Development Council, it was set up to strengthen and institutionalize mechanisms for maintaining financial stability, enhancing inter-regulatory coordination, and promoting financial sector development.
Ques: 5
The FSDC replaced the:
Correct Answer:
(B) High-Level Coordination Committee on Financial Markets (HLCCFM)
The High-Level Coordination Committee on Financial Markets (HLCCFM), which had previously made informal regulatory coordination simpler, has been replaced by the FSDC. FSDC continues influencing India's financial stability and the economy through integrating financial monitoring into an organized framework.
Ques: 6
The FSDC's focus includes all of the following except:
Correct Answer:
(D)
Implementing monetary policy
Ques: 7
The FSDC's role in financial sector development includes:
Correct Answer:
(B) Promoting financial inclusion and financial literacy
The FSDC is tasked with promoting inter-regulatory cooperation to ensure seamless coordination among regulatory bodies and financial institutions. The council also undertakes initiatives to foster financial sector development and enhance financial inclusion and literacy among the masses.
Ques: 8
Which of the following is a key function of the FSDC in maintaining financial stability?
Correct Answer:
(B) Monitoring macroeconomic developments and assessing risks
A key function of the FSDC in maintaining financial stability is monitoring macroeconomic developments and assessing potential risks to the financial system. This includes analyzing economic trends, market developments, and identifying vulnerabilities within financial institutions. The FSDC then develops policies to address these risks and enhance the resilience of the financial sector.