An Economic Analysis of Banking Sector Reforms in India

Abstract

The Indian banking industry plays a pivotal role in the economic development, effective existence of banking system boosts up money circulation and controls surplus money as and when required.The analysis of Indian Financial Sector reveals that it is at present going through a phase of growth rate which is experiencing an upward swing. The rise can be maintained over a long period by keeping the inflation down. The financial sector in India has experienced a growth rate of 8.5% per annum. The rise in the growth rate suggests the growth of the economy. The financial policies and the monetary policies are able to sustain a stable growth rate. The reforms pertaining to the monetary policies and the macroeconomic policies over the last few years have influenced the Indian economy to the core. The major step towards opening up of the financial market further was the nullification of the regulations restricting the growth in the financial sector. This paper focuses on India's banking sector, which has been attracting increasing attention since 1991 when financial reform programme was launched.