Union finance minister Nirmala Sitharaman on Friday urged financial sector regulators to expedite refunds of unclaimed assets to their rightful owners, simplify know-your-customer (KYC) processes and strengthen cybersecurity preparedness amid rising geopolitical uncertainties.
The issues were discussed at a meeting of the Financial Stability and Development Council (FSDC), the apex body for inter-regulatory coordination in the financial sector, chaired by Sitharaman.
The Council took note of the Financial Sector Cyber Security Strategy (FSCSS), formulated by an inter-ministerial group comprising financial sector regulators and cybersecurity agencies, according to a finance ministry statement.
Mandated by the Council in August last year, the strategy envisages regulatory harmonisation and unified cybersecurity standards across the financial sector. It also seeks to strengthen risk management frameworks for emerging technologies, including artificial intelligence (AI), cloud computing and quantum technologies, while improving the resilience of third-party service providers.
“The implementation of the FSCSS is expected to strengthen the overall resilience of the Indian financial sector,” the statement said.
The Council reviewed measures to implement previous decisions and budget announcements, including strengthening the domestic investment ecosystem and improving resource flows for investment, particularly in the Gujarat International Finance Tec-City International Financial Services Centre (GIFT-IFSC).
Discussions also covered the simplification and digitisation of KYC processes and digital onboarding for non-resident Indians (NRIs) and foreign portfolio investors (FPIs).
The FSDC deliberated on expanding digital public infrastructure, including the account aggregator framework and the Unified Lending Interface (ULI), with a focus on micro, small and medium enterprises (MSMEs). Members also discussed reducing financial intermediation costs, improving regulatory responsiveness and rationalising credit guarantee schemes.
“The FSDC took cognizance of the emerging trends from domestic and global macro-financial situations and stressed upon the need to be vigilant especially in view of the ongoing geopolitical uncertainties, AI boom and steep rise in global bond yields,” the statement said.
The Council stressed the need for proactive measures to mitigate potential risks to financial stability and strengthen the financial system’s resilience.
Sitharaman urged regulators and other stakeholders to expedite refunds of unclaimed assets, including bank deposits, dividends, shares, post office accounts, insurance and pension funds, to their rightful owners.
Given rising geopolitical headwinds and global uncertainty, she also urged the Council to hold FSDC meetings more frequently according to a predefined schedule.
The meeting also reviewed India’s preparedness to protect critical information infrastructure and strengthen cybersecurity systems, including preparedness among regional rural banks.
Those attending included Reserve Bank of India governor Sanjay Malhotra, economic affairs secretary Anuradha Thakur, financial services secretary Sanjay Lohiya, revenue secretary Arvind Shrivastava, electronics and information technology secretary S Krishnan and Securities and Exchange Board of India chairman Tuhin Kanta Pandey, along with other financial sector regulators.