With reference to ‘Financial Stability and Development Council’, consider the following statements: 1. It is an organ of NITI Aayog. 2. It is headed by the Union Finance Minister. 3. It monitors macroprudential supervision of the economy. Which of the statements given above is/are correct?

The correct answer is C (2 and 3 only). The Financial Stability and Development Council (FSDC) was set up by the Union Cabinet in December 2010 on the recommendation of the High Level Coordination Committee on Financial Markets, following the 2008 global crisis. It is chaired by the Union Finance Minister.

• Statement 1 is wrong. FSDC is not an organ of NITI Aayog. It is a high-level council under the Finance Ministry, with the Finance Minister as chair and the heads of RBI, SEBI, IRDAI, PFRDA and the Finance and Economic Affairs Secretaries as members. NITI Aayog is a policy think-tank with no regulatory role in this body.
• Statement 2 is correct. The Union Finance Minister heads the FSDC.
• Statement 3 is correct. The FSDC's core job is to monitor macroprudential supervision of the financial system, identify systemic risk, and improve regulatory coordination among financial regulators.

Fact update: the Forward Markets Commission was merged into SEBI in 2015, so it no longer appears in FSDC's membership. The core concept here is systemic risk and regulatory coordination, which matters for Mains GS-III on banking reforms and financial sector regulation.

Trap: Aspirants often attach any high-profile council to NITI Aayog. Remember that FSDC is an executive body under the Finance Ministry, not a NITI Aayog wing.