|
|
| |
FINANCIAL SECTOR |
| |
| The financial sector is in a process of rapid transformation. Reforms are continuing as part of the overall structural reforms aimed at improving the productivity and efficiency of the economy. The role of an integrated financial infrastructure is to stimulate and sustain economic growth. The US$ 28 billion Indian financial sector has grown at around 15 per cent and has displayed stability for the last several years, even when other markets in the Asian region were facing a crisis. This stability was ensured through the resilience that has been built into the system over time. The financial sector has kept pace with the growing needs of corporate and other borrowers. Banks, capital market participants and insurers have developed a wide range of products and services to suit varied customer requirements. The Reserve Bank of India (RBI) has successfully introduced a regime where interest rates are more in line with market forces. |
| Financial institutions have combated the reduction in interest rates and pressure on their margins by constantly innovating and targeting attractive consumer segments. Banks and trade financiers have also played an important role in promoting foreign trade of the country. |
| |
CAPITAL MARKET |
| |
| The Indian capital markets have witnessed a transformation over the last decade. India is now placed among the mature markets of the world. Key progressive initiatives in recent years include: |
| |
1. |
The depository and share dematerialisation |
2. |
systems that have enhanced the efficiency of the transaction cycle |
3. |
Replacing the flexible, but often exploited, forward trading mechanism with rolling |
4. |
settlement, to bring about transparency |
5. |
The infotech-driven National Stock Exchange (NSE) with a national presence (for the benefit of investors across locations) and other initiatives to |
6. |
enhance the quality of financial disclosures. |
7. |
Corporatisation of stock exchanges. |
8. |
The Securities and Exchange Board of India (SEBI) has effectively been functioning as an independent regulator with statutory powers. |
9. |
Indian capital markets have rewarded Foreign Institutional Investors (FIIs) with attractive valuations and increasing returns. |
10. |
Many new instruments have been introduced in the markets, including index futures, index options, derivatives and options and futures in select stocks. |
| |
