Financial data management centre (FDMC)

• The Committee, headed by Ajay Tyagi ,  has suggested setting up a financial data management centre (FDMC) for managing the repository of financial regulatory data to ensure stability in the economy.
• The powers of the Financial Data Management Centre (FDMC) will include the establishment, operation and maintenance of the financial system database along with collecting financial regulatory data and providing access to it.
• The body will also provide analytical support to the Financial Stability and Development Council (FSDC) on issues relating to financial stability.

Advantages of FSDC:

• It will be the single, unified source for filing and storage of all financial regulatory data that is collected, used and managed by financial sector regulators today, or in the future. Any regulatory filings required by financial regulators will be made to them via the FDMC. The FDMC will provide access to financial regulators to all data that they require or request, pertaining to their jurisdiction.
• It will develop the standards of data collection and data standardization through a consultative process with the Central Government, FSDC and the financial sector regulators.
• It will develop the techniques for data validation and clean up before the data is made available to financial sector regulators and the Central Government.
• It will ensure that its actions lead to greater efficiency in accessing financial regulatory data.
• It willensure that its actions lead to reduction in costs of submitting the financial regulatory data, compared to the existing costs to financial firms
• Commence the process of collecting and standardizing all the existing financial regulatory information from financial sector regulators and have advanced data management capabilities with electronic data submission, generate a full view of entire financial system,and sharply reduce costs of  compliance for financial firms submitting regulatory/ supervisory data to financial agencies.

Other important recommendations made by the committee:

• Efforts should be concentrated on framing the law, setting up of centre and standardizing processes around collection of data from central level regulators and entities.
• As the system matures and if it is decided to integrate data of state level financial sector regulators, the same has to be done with wide consultation with the states, which is a long drawn process.
• Centre should establish an electronic database for financial regulatory information. It should be in-charge of the day to day operations, maintenance and updating the electronic database, analyse the data submitted in the database and provide analytical support to FMDC.
• To ensure secrecy and avoid conflict of interest, member, employee or officer of the centre having access to confidential data should not be allowed to render advice or accept any employment with a financial service provider for a period specified in the act until the person has taken approval of the centre.
• The committee has also asked the government to grant the status of “public servants” to the members, officers and employees of the centre.
   

By: Vishal