Ukraine crisis, crude prices posing challenge to financial stability: FM

New Delhi, February 22

Union Minister for Finance Nirmala Sitharaman on Tuesday said the Russia-Ukraine crisis and the consequent jump in global crude prices would be a challenge to financial stability in India. The two issues were discussed at the meeting of Financial Stability Development Council (FSDC), which comprises all financial sector regulators, Sitharaman said while interacting with the media in Mumbai.

“It is difficult to say how it (crude prices) will go. Even today, in the FSDC, when we were looking at the challenges which are posed for financial stability, crude was one of the things. International worrisome situations where we actually voiced that we want a diplomatic solution for the situation that is developing in Ukraine… all these are headwinds,” she observed.

Trade not impacted

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Trade has not been impacted because of the geopolitical tensions but the government is keeping a close watch on the same. — Nirmala Sitharaman, Finance Minister

Brent crude has touched over $98 per barrel on Tuesday and the country is keeping a close watch on the prices. However, the oil marketing companies will take a call on the retail prices, she said amid talk that pump prices will be hiked as soon as the last phase of polling is over in UP on March 7.

Trade has not been impacted because of the geopolitical tensions but the government is keeping a close watch on the same, Sitharaman said adding that we are careful that the exporters should not suffer.

Parrying questions on the exact timeline for the LIC IPO, she said there is a buzz and interest in the market after the life insurance behemoth filed its papers with SEBI for the over Rs 60,000-crore issue, and the government will be going ahead with it.

She also said the government is looking into the lapses that happened at the NSE.

Underscoring the importance of information sharing and collaboration, she asked banks to sign up to the account aggregator model which would facilitate seamless flow of credit for small borrowers and promote digital lending.

The way forward for stepping up the lending activity and building a conducive credit environment for businesses and individuals was also stressed upon in the meeting.

OIL NEARS $100-MARK

• The price of futures contract for Brent crude oil with April delivery on London’s ICE rose by 4.18% to $99.38 per barrel on Tuesday morning, before paring some gains to settle just above $98
• The last time Brent exceeded $99 per barrel was in September 2014