Economy
Financial Sector
The Financial Sector stands as the very bedrock of any modern economy, serving as the critical conduit that mobilizes savings and channels them into productive investments. It encompasses a vast
55 articles in this topic
Articles on Financial Sector
NITI Aayog Releases Report on “Deepening the Corporate Bond Market in India”
Context NITI Aayog has released the report titled “Deepening the Corporate Bond Market in India. About The report examines the current state, challenges, and future roadmap for strengthening India’s corporate bond market—a key financing avenue for corporations, infrastructure, MSMEs, and emerging sectors. A deep and liquid corporate bond market helps mobilise long-term capital, reducing over-reliance on bank credit and supporting economic growth.
Savings Shift Reshapes India’s Markets
Context Domestic household savings are replacing Foreign Portfolio Investors (FPIs) as the dominant market force in India. About The latest NSE (National Stock Exchange) Market Pulse report shows Foreign Portfolio Investor (FPI) ownership of Indian equities at a 15-month low of 16.9% and 24.1% in the NIFTY 50. Meanwhile, domestic Mutual Funds (MFs) are hitting new highs quarter after quarter.
‘Persistent & Systemic Challenges’ Undermine IBC’s Full Potential: Parliamentary Committee
Context Recently, the Parliamentary Standing Committee on Finance, in its report ‘Review of Working of Insolvency and Bankruptcy Code and Emerging Issues’, warned that systemic inefficiencies and structural delays are undermining India’s Insolvency and Bankruptcy Code (IBC) effectiveness. About Insolvency and Bankruptcy Code (IBC) It was enacted in 2016, at a time when mounting non-performing assets (NPAs) and ineffective recovery mechanisms — such as SARFAESI, Lok Adalats, and Debt Recovery Tri
Banking Laws (Amendment) Act, 2025
Context Indias banking sector has undergone a remarkable transformation, and Banking Laws (Amendment) Act, 2025 is a step towards strengthening governance standards in the banking sector. Need for the Banking Amendment Act, 2025 Rising Unclaimed Deposits: A substantial amount in banks remains unclaimed due to the absence of nominees. The Act addresses this challenge by establishing a structured, seamless succession mechanism.
National Strategy For Financial Inclusion 2025–30
Context The Reserve Bank of India (RBI) has released the National Strategy for Financial Inclusion (NSFI) 2025–30, outlining a five-year plan (Panch-Jyoti) to deepen and widen financial inclusion in India. About The strategy, approved by the Sub-Committee of the Financial Stability and Development Council (FSDC), sets out five strategic objectives supported by a comprehensive Panch-Jyoti framework and 47 actionable steps. As per the World Bank, financial inclusion means that individuals and busi
Proposed Reforms at Securities and Exchange Board of India’s (SEBI)
Context Recently, the High-Level Committee (HLC) of Securities and Exchange Board of India’s (SEBI) has proposed a comprehensive set of reforms aimed at reinforcing transparency, ethical governance, and investor confidence. Why Do Recommendations Matters? Restoring Investor Confidence: Retail investors need assurance that market regulation is fair and impartial, with over 170 million demat accounts across India.
SEBI Warns Against Digital Gold Risks
Context The Securities and Exchange Board of India (SEBI) has cautioned the general public against investing in digital gold and e-gold products. About The investment in digital gold has existed for several years, but there has been a surge in their popularity over the last one year. The reasons include a steep rise in gold prices, combined with the convenience, and ease of owning gold digitally through online platforms.
Urban Cooperative Banks
Context Recently, the Union Home and Cooperation Minister, at the ‘Co-op Kumbh 2025’, called on Urban Cooperative Banks (UCBs) to play a transformative role in empowering India’s youth and underprivileged communities. Key Highlights of Co-op Kumbh 2025 ‘Delhi Declaration 2025’: It was adopted by the National Federation of Urban Cooperative Banks and Credit Societies (NAFCUB), focusing on enhancing financial stability, governance, and digitization within the cooperative banking network. Digital P
The Sevilla Forum Launched to Tackle Global Debt Crisis
Context At the 16th United Nations Conference on Trade and Development (UNCTAD16) held in Geneva, a new global initiative, the Sevilla Forum on Debt, was launched. About the Sevilla Forum The Forum, led by Spain and supported by UNCTAD and the United Nations Department of Economic and Social Affairs (UN DESA), aims to create a permanent, inclusive platform for dialogue and coordinated action on sovereign debt challenges. The Sevilla Commitment lays down a roadmap for strengthening development fi
Strengthening Rural Growth with Enhanced Agricultural Credit
Context The Union Finance Minister urged rural banks to enhance agricultural credit disbursement to meet the evolving financial needs of New Rural India, while reviewing the performance of Karnataka Grameena Bank (KaGB) in Ballari. Agriculture Credit in India Sources of Agricultural Credit: Public sector banks (like the State Bank of India), regional rural banks (RRBs), cooperatives, and NABARD (National Bank for Agriculture and Rural Development) provide most formal agricultural credit.
RBI Supervision for EPFO, Post Office Bank
Context The Employees’ Provident Fund Organisation (EPFO) and the Post Office Savings Bank (POSB) — may soon come under the Reserve Bank of India’s (RBI) supervision. About Post Office Savings Bank (POSB): A ₹96 crore scam uncovered in 2024 involving fraudulent operations in POSB schemes over a 24-month period. Following this, it has reached out to the Department of Economic Affairs in the Ministry of Finance seeking a supervisory pact with the RBI for undertaking a review of internal controls.
GIFT City's New Forex Settlement System
Context Union Finance Minister Nirmala Sitharaman launched a Foreign Currency Settlement System (FCSS) at the International Financial Services Centre (IFSC) in Gujarat International Finance Tec-City (GIFT City). Significance Faster settlements: Earlier, settlements took 36–48 hours through the traditional correspondent banking system, involving foreign intermediaries. Real Time Transactions: Transactions in foreign currencies (like USD, Euro, Yen) can now be settled in real time or near real tim
RBI Introduces Unified Markets Interface to Tokenize Financial Assets
In News The Reserve Bank of India (RBI) is advancing asset tokenization with its new Unified Markets Interface (UMI). Asset Tokenization Definition: It converts real-world assets into digital tokens on blockchain, creating fractional ownership and global trading opportunities. Outcome: It offers new possibilities for the financial markets in expanding access, improving transparency and enhancing settlement efficiency through smart contracts.
RBI Grants SRO Status to Finance Industry Development Council (FIDC)
Context The Reserve Bank of India (RBI) has officially recognised the Finance Industry Development Council (FIDC) as the Self-Regulatory Organisation (SRO) for the non-banking financial company (NBFC) sector. What are Self‑Regulatory Organisations (SROs)? The RBI’s Omnibus Framework describes an SRO as a non‑governmental organisation that is authorised by a regulator to regulate and oversee a particular industry or sector.
India's Outward Remittances Dips 11% Under Liberalised Remittance Scheme
Context Outward remittances by resident individuals under the Reserve Bank of India’s Liberalised Remittance Scheme (LRS) fell nearly 11% year-on-year in July 2025, totalling $2,452.93 million against $2,754.05 million in the same period last year. What are Remittances? Remittances are a way to electronically send funds to people, often family, in another country.
CAG Report on States Fiscal Health: Decadal Surge in Public Debt
Context The Comptroller and Auditor General (CAG) has released a decadal analysis of the fiscal health of India’s 28 states, highlighting a sharp rise in public debt over the last decade. Key Findings of the Report Debt Growth: States’ combined public debt trebled from ₹17.57 lakh crore in 2013-14 to ₹59.60 lakh crore in 2022-23. As a share of GSDP, debt rose from 16.66% (2013-14) to 22.96% (2022-23).
Out-of-Pocket Health Expenditure (OOPE) in India
Context Despite a sharp decline in out-of-pocket expenditure (OOPE) on health in India, closer scrutiny reveals persistent concerns associated with it. About Out-of-Pocket Expenditure (OOPE) It refers to the direct payments individuals make for healthcare services — without reimbursement. It includes costs for doctor consultations, medicines and diagnostics, hospitalization and surgeries, transportation and informal care etc.
Funding Microfinance in India
The microfinance sector in India has been in the news for reasons like issues of over-leverage, higher delinquency and unhealthy collection practices.
India’s Foreign Capital Paradox
Context India is the world’s fastest-growing major economy, with its annual GDP increase averaging 8.2% during 2021 to 2024, yet, it is not attracting commensurate foreign capital inflows. About India is among the world’s fastest-growing major economies (GDP growth 7.4% in Jan–Mar 2025, 7.8% in Apr–Jun 2025). Despite this momentum, foreign capital inflows are declining, creating a “foreign capital paradox”.
Banking Industry: A Pillar of India’s Growth Story
Context Recently, the President of India underscored the transformative role of India’s banking sector in shaping the nation’s economic trajectory. About the Banking Industry in India India’s banking sector is a financial intermediary, primary conduit for credit delivery, liquidity modulation, financial inclusion, and serves as the operational backbone of macroeconomic management. Cooperative and Local Area Banks: Serve niche markets and rural populations.