International Commitments, Financial Infrastructure and Economic Development: Evidences from Indian Banking
Business Vision, Vol. 3, No. 1, pp. 45-61, 2007
17 Pages Posted: 27 Jun 2010
Date Written: 2007
Abstract
Banking sector being the crucial among the financial infrastructure has seen several changes in past one decade. The commitments made along with several international recommendations in this sector have brought several important policy changes during the last ten years to strengthen the financial sector in general and banking in particular. There has been a rapid entry of foreign banks into the Indian banking sector which has spurred the competition in the delivery mechanism as well as variety of services. The recommendations of Basel committee have also been increasingly accepted in India. This has brought several regulatory changes including the most important areas viz. risk management and supervision in banking. With increase access to foreign banks, deregulation of interest rates, changes in regulatory and supervisory framework etc. have made Indian banking more transparent, resilient and efficient. But it is also found that high level of international commitment made by different countries has not insulated them from banking crisis. So it is imperative on the part of India to ensure a strong regulatory and supervisory mechanism for banking sector for a dynamic and more resilient financial infrastructure.
Keywords: Banking, International Commitments
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