Growth of Financial Sector in India

The growth of financial sector in India at present is nearly 8.5% per year. 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 macro economic policies over the last few years has 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 of the financial sector in India. To maintain such a growth for a long term the inflation has to come down further.

The financial sector in India had an overall growth of 15%, which has exhibited stability over the last few years although several other markets across the Asian region were going through a turmoil. The development of the system pertaining to the financial sector was the key to the growth of the same. With the opening of the financial market variety of products and services were introduced to suit the need of the customer. The Reserve Bank of India (RBI) played a dynamic role in the growth of the financial sector of India.

The growth of financial sector in India was due to the development in sectors



Growth of the banking sector in India



The banking system in India is the most extensive. The total asset value of the entire banking sector in India is nearly US$ 270 billion. The total deposits is nearly US$ 220 billion. Banking sector in India has been transformed completely. Presently the latest inclusions such as Internet banking and Core banking have made banking operations more user friendly and easy.

Growth of the Capital Market in India



  • The ratio of the transaction was increased with the share ratio and deposit system
  • The removal of the pliable but ill-used forward trading mechanism
  • The introduction of infotech systems in the National Stock Exchange (NSE) in order to cater to the various investors in different locations
  • Privatization of stock exchanges

Growth in the Insurance sector in India



  • With the opening of the market, foreign and private Indian players are keen to convert untapped market potential into opportunities by providing tailor-made products.

  • The insurance market is filled up with new players which has led to the introduction of several innovative insurance based products, value add-ons, and services. Many foreign companies have also entered the arena such as Tokio Marine, Aviva, Allianz, Lombard General, AMP, New York Life, Standard Life, AIG, and Sun Life.

  • The competition among the companies has led to aggressive marketing, and distribution techniques.

  • The active part of the Insurance Regulatory and Development Authority (IRDA) as a regulatory body has provided to the development of the sector.


Growth of the Venture Capital market in India



  • The venture capital sector in India is one of the most active in the financial sector inspite of the hindrances by the external set up.

  • Presently in India there are around 34 national and 2 international SEBI registered venture capital funds

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