The Indian banking system is well protected from the vagaries of the global financial turmoil that saw the collapse of Silicon Valley Bank in the US and the firesale of Credit Suisse to UBS.

“The global financial situation is daunting. But at the same time, the Indian economy and especially the Indian financial sector is well protected. Well-regulated systems are there,” economic affairs secretary Ajay Seth said after the 27th meeting of the Financial Stability and Development Council here on Monday.

However, he warned that India has to be cautious and be on the lookout for early warning indicators that provide signs of financial sector stress.

“The Indian financial sector is well protected, well regulated but at the same time, we have to be cautious and be on our toes as soon as early warning indicators are there”.

The FSDC meeting was chaired by finance minister Nirmala Sitharaman andwas attended by RBI governor Shaktikanta Das, amongothers.

There are a set of indicators which provide early warning indicators so that the stresses are noticed well in time to take the corrective measures, Seth said.

Asked whether the council discussed India’s exposure to the Western financial system, he said it was not specifically discussed. However, whether spillover can occur and the channels of potential risks were debated.

On the G-sec market, he said, “With the use of technology, how a seamless experience can be provided to potential investors, whether they come through the RBI infrastructure, which is the market infrastructure route, or the Sebi infrastructure route, hitherto which was not possible but today with the use of technology is possible”.

The council also deliberated on early warning indicators for the economy and the preparedness to deal with them, reducing the compliance burden on the regulated entities in the financial sector by improving regulatory quality.

Th meeting discussed debt levels of corporates and households in India, simplification and streamlining of KYC framework to meet the needs of Digital India, he said.

Besides the RBI governor, Securities and Exchange Board of India chairperson Madhabi Puri Buch, Insurance Regulatory and Development Authority of India (Irdai) chairman Debasish Panda, Insolvency and Bankruptcy Board of India (IBBI) chairman Ravi Mital and Pension Fund Regulatory and Development Authority’s newly appointed chairman Deepak Mohanty participated in the meeting.

On the unclaimed deposits matter, Seth said the FSDC was of the view that a drive should be undertaken to ensure people get their unclaimed deposits lying with financial institutions.