Financial sector in the country

Reforming the financial sector was the central plank of the strategy of economic reforms, initiated in the early nineties in the country. Some of the unique features of the reforms in the financial sector are that these were carefully sequenced with regard to certain objectives and instruments, crafted through domestic expertise, were gradualist, followed a process of consultations and targeted for international standards. In the process and to keep proper alignment with reforms in other sectors of the economy, there emerged certain critical issues which required appropriate harmonization and rebalancing of policies within the overall macroeconomic framework. In the process of opening up the financial sector towards globalization, there emerged a large number of legal, institutional and regulatory issues throwing unique challenges for policy changes. These required empirical tests to weigh the pros and cons of consequences of reform measures initiated.