Analysis of Indian Financial Sector

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Analysis of Indian Financial Sector reveals that it is at present going through a phase of stable growth rate which is experiencing a 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 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 in the financial sector. To maintain such a growth for a long term the inflation has to come down further. The analysis of Indian financial sector shows the growth of the sector was the result of the individual development of the divisions under the sector.

The analysis of Indian financial sector

Analysis of the Indian Capital market

  • 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

Analysis of the Indian Venture Capital market

  • 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.

Analysis of the Indian Banking sector

  • 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.

Analysis of the Indian Insurance sector

  • 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.

Opportunities for the financial sector of India

  • The distributed financial gain of the venture capital funds is not taxed. The financial gains are taxed after the investors receive as income.

  • The have more insurance and banking products introduced into the market to broaden the spectrum which in turn would boost the growth of the sector.

  • Further nullification of the regulations have to take place in order to increase the competition and boost the growth of the financial sector to reach the US$ 51 billion mark.
Find below detailed information on Financial Sector in India: