{ "title": "Indian Financial Sector: Structure, Trends and Turns", "publication": "IMF Working Papers, January 20, 2017", "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2017/01/20/indian-financial-sector-structure-trends-and-turns-44554", "canonical": "https://www.imf.org/en/publications/wp/issues/2017/01/20/indian-financial-sector-structure-trends-and-turns-44554", "overlayPath": "/en/publications/wp/issues/2017/01/20/indian-financial-sector-structure-trends-and-turns-44554/index.md", "summary": "This paper traces the story of Indian financial sector over the period 1950–2015. In identifying the trends and turns of Indian financial sector, the paper adopts a three period classification viz.", "sections": [ { "heading": "Historical periodization and overview", "content": "- Time horizon covered: 1950–2015.\n- Three-period classification:\n - The 1950s and 1960s: elements of instability associated with laissez faire but underdeveloped banking.\n - The 1970s and 1980s: financial development under government auspices accompanied by a degree of financial repression.\n - Since the 1990s till date: gradual and calibrated financial deepening and liberalization.\n- Focus emphasis: greater attention on the third period (since the 1990s)." }, { "heading": "Reforms, market determination, and regimes", "content": "- Consequence of successive reforms over the past 25 years:\n - Significant progress in making interest and exchange rates largely market determined.\n - Exchange rate regime remains one of managed float.\n - Some interest rates remain administered." }, { "heading": "Banking sector structure and competition", "content": "- Competition:\n - Considerable competition introduced through new private sector banks.\n - Public sector banks continue have a dominant share in the market.\n- Ownership and future direction:\n - Future development areas include further reduction of public ownership in banks." }, { "heading": "Contractual savings, insurance, and pensions", "content": "- Contractual savings systems have been improved.\n- Pension funds in India are characterized as still in their infancy.\n- Insurance sector:\n - New private sector insurance companies have been introduced.\n - Coverage of insurance can expand much further, which would also provide greater depth to the financial markets.\n- Policy direction:\n - Expansion of the contractual savings system through more rapid expansion of the insurance and pension systems.\n - Greater spread of mutual funds and development of institutional investors." }, { "heading": "Financial markets: equity and debt", "content": "- Uneven development across segments:\n - Equity market is quite developed.\n - Private debt market activities are predominantly confined to private placement form and continue to be limited to the bluechip companies.\n- Implication:\n - Broader development of contractual savings, insurance, pensions, mutual funds, and institutional investors is expected to enable both the equity and debt markets to display greater breadth as well as depth, along with greater domestic liquidity." }, { "heading": "Policy recommendations and future areas for development", "content": "- Reduce public ownership in banks and insurance companies.\n- Expand contractual savings via insurance and pension system growth.\n- Promote greater spread of mutual funds.\n- Develop institutional investors to deepen markets.\n- While reforming the financial sector, maintain attention to issues of equity and efficiency.\n\nRakesh Mohan and Partha Ray, January 20, 2017 — Indian Financial Sector: Structure, Trends and Turns (IMF Working Paper).\n\n---\n\n Content in this bundle\n\n- Indian Financial Sector: Structure, Trends and Turns\n - Indian Financial Sector: Structure, Trends and Turns (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Indian Financial Sector: Structure, Trends and Turns (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2017/01/20/indian-financial-sector-structure-trends-and-turns-44554" } ], "bullets": [ "[Markdown version](/en/publications/wp/issues/2017/01/20/indian-financial-sector-structure-trends-and-turns-44554/index.md)", "[Structured JSON version](/en/publications/wp/issues/2017/01/20/indian-financial-sector-structure-trends-and-turns-44554/index.json)", "[Bundle manifest](/en/publications/wp/issues/2017/01/20/indian-financial-sector-structure-trends-and-turns-44554/bundle-manifest.json)", "Authors: Rakesh Mohan, Partha Ray", "Published: January 20, 2017", "Series: IMF Working Papers", "DOI: https://doi.org/10.5089/9781475570168.001", "Time horizon covered: 1950–2015.", "Three-period classification:", "Focus emphasis: greater attention on the third period (since the 1990s).", "Consequence of successive reforms over the past 25 years:", "Competition:", "Ownership and future direction:", "Contractual savings systems have been improved.", "Pension funds in India are characterized as still in their infancy.", "Insurance sector:", "Policy direction:", "Uneven development across segments:", "Implication:", "Reduce public ownership in banks and insurance companies.", "Expand contractual savings via insurance and pension system growth.", "Promote greater spread of mutual funds.", "Develop institutional investors to deepen markets.", "While reforming the financial sector, maintain attention to issues of equity and efficiency.", "**Indian Financial Sector: Structure, Trends and Turns**" ], "related": [ { "title": "Indian Financial Sector: Structure, Trends and Turns", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/wp/wp1707.pdf", "summary": { "path": "/-/media/files/publications/wp/wp1707.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/wp/wp1707.pdf", "mime": "application/pdf" } } ], "alternates": { "markdown": "/en/publications/wp/issues/2017/01/20/indian-financial-sector-structure-trends-and-turns-44554/index.md", "json": "/en/publications/wp/issues/2017/01/20/indian-financial-sector-structure-trends-and-turns-44554/index.json", "bundleManifest": "/en/publications/wp/issues/2017/01/20/indian-financial-sector-structure-trends-and-turns-44554/bundle-manifest.json" }, "generatedAtUtc": "2026-09-18T10:56:22.054Z" }