Vol. 4, Issue 1, Part F (2018)

Abstract
The Indian financial sector has undergone a significant structural transformation since the initiation of the economic reforms in 1990’s. Financial sector reforms mainly entailed reforms of the banking system and the capital market. As a result of reforms since 1991, the financial markets have transited to a regime of market-determined interest and exchange rates, current account convertibility, phased capital account liberalization and an auction based system in the government securities market. Policy initiatives have tried to ensure financial stability, curbing excessive fluctuations and volatility in interest rates, exchange rates and hence moderating inflation without choking credit to productive sectors, thus mitigating risks arising out of deregulation and globalization of financial markets and helping in the efficient allocation of resources in the real sectors of the economy.