Chidambaram advises vigil on market volatility

Finance minister P Chidambaram has urged all sectoral regulators to be watchful of developments in the market and large volatility in key parameters amidst rising inflows into the country's security markets.

Addressing a meeting of the Financial Stability and Development Council (FSDC) held under his chairmanship, Chidambaram called upon the regulators and the ministry of finance to be in a state of readiness and take necessary action if the situation so warrants.

The tenth meeting of the FSDC took stock of the Indian economy and deliberated on domestic and global growth scenario, fiscal, monetary and external sector, foreign capital flows, inflation, developments in financial markets and the outlook and challenges facing the Indian economy.

The council also discussed the detailed assessment of external sector vulnerabilities of the economy while recognising the improvement made in controlling current account deficit (CAD), exchange rate volatility etc.

The council took stock of the progress made by the FSDC sub committee and its technical groups in a number of areas like bank capitalisation under the risk based supervisory framework, non-legislative recommendation (NLR) of FSLRC, account aggregation for all asset classes, AMCs managing funds of insurance companies and pension funds, functioning of state-level coordination committees, lending by insurance companies, strengthening and deepening the interest rate futures (IRF) market in India.

The meeting of the FSDC was attended among others by RBI governor Raghuram G Rajan, finance secretary Arvind Mayaram, financial services secretary GS Sandhu, Sebi chairman UK Sinha, IRDA chairman TS Vijayan, FMC chairman Ramesh Abhishek and chairman of pension sector regulator who also holds concurrent chargeas chairman of PFRDA, Anup Wadhawan, and other senior officials of the government of India.