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
Rise and Risks of Health Insurance in India
Over the past decade, India’s health insurance coverage has surged, largely due to government schemes seen as progress toward Universal Health Coverage (UHC). However, critics argue that insurance alone cannot replace strong public health infrastructure.
S&P Upgrades India’s Sovereign Rating to ‘BBB’
In News SP Global Ratings has upgraded India’s long-term sovereign credit rating from ‘BBB-’ to ‘BBB’ with a Stable Outlook. More about the News This is the first upgrade of India’s sovereign rating by SP in 18 years. SP’s decision reflects India’s sustained high economic growth, successful fiscal consolidation, and improved policy predictability.
RBI’s New Co-Lending Rules
Context The Reserve Bank of India (RBI) has issued revised guidelines to tighten co-lending arrangements between banks and non-banking financial companies (NBFCs), effective January 1, 2026. What is Co-Lending? It refers to the collaborative loan service where two lending institutions jointly fund loans to borrowers.
Environmental, Social, and Governance (ESG)
In News A Parliamentary panel has called on the Ministry of Corporate Affairs (MCA) to create a dedicated oversight body for Environmental, Social, and Governance (ESG) issues. What is Environmental, Social, and Governance (ESG)? It is a framework used to evaluate a companys performance on non-financial factors.
RBI Caps Investment by Banks, NBFCs at 20% of Corpus of AIF scheme
In News The Reserve Bank of India (RBI) has issued new guidelines capping investments by Regulated Entities (REs) in Alternative Investment Fund (AIF) schemes. Alternative Investment Fund (AIF) It is a privately pooled investment which collects money from investors and invests it in non-traditional asset classes. These Funds are ideal for High Net-worth Individuals (HNIs) because they need a high amount of investment.
India’s Insurance Sector Set to More Than Double by 2030: IBAI-McKinsey Report
Context Recently, a joint report by the Insurance Brokers Association of India (IBAI) and McKinsey Company outlined that Indias insurance industry is projected to surge by 123% by 2030 — from ₹11.2 lakh crore in 2024. Policy Support for India’s Insurance Sector IRDAI’s Vision 2047: The Insurance Regulatory and Development Authority of India (IRDAI) is driving reforms to bridge protection gaps and simplify access to insurance. Legislative Support: Key acts include the Insurance Act (1938), IRDA A
RBI’s Financial Inclusion Index
In News The Reserve Bank of India’s Financial Inclusion Index (FI-Index) rose by 4.3% in FY25. Importance Financial inclusion supports entrepreneurship and business growth. It is a catalyst for achieving seven of the 17 Sustainable Development Goals (SDGs).
Catastrophe Bonds (Cat Bonds)
Catastrophe Bonds (Cat Bonds) are innovative financial instruments that transfer natural disaster risks from sponsors to capital market investors. They are crucial for UPSC aspirants studying economics and disaster management.
Sovereign Debt is Rising in Developing World
Context The fourth International Conference on Financing for Development (FfD4) is being held in Spain which brings focus on the massive debt burden on developing countries. Sovereign debt on Developing Countries Since 2010, sovereign debt in developing countries has grown twice as fast in developed economies — with its share in global total increasing to 30% in 2023, from just 16% in 2010. As per the World Bank 2024 Report, Developing countries spent a record $1.4 trillion to service their fore
India's First Maritime NBFC Launched
In News The Union Minister of Ports, Shipping Waterways (MoPSW) inaugurated Sagarmala Finance Corporation Limited (SMFCL). Sagarmala Finance Corporation Limited (SMFCL) It was formerly known as Sagarmala Development Company Limited. It is a Mini Ratna, Category-I, Central Public Sector Enterprise and has been formally registered as a Non-Banking Financial Company (NBFC) with the Reserve Bank of India (RBI) .
RBI’s Revised PSL Guidelines for Small Finance Banks
In News The Reserve Bank of India (RBI) has relaxed priority sector lending (PSL) norms for Small Finance Banks (SFBs). Small Finance Banks (SFBs) About: They are operational under the regulation of the RBI in India, under the purview of the apex bank’s Banking Ombudsman Scheme, 2006, as amended from time to time. SFBs are registered as public limited companies under the Companies Act, 2013 and governed by Banking Regulations Act, 1949; RBI Act, 1934.
Strengthening Core Principles of Insolvency and Bankruptcy Code (IBC)
Recent developments suggest that the effectiveness of the Insolvency and Bankruptcy Code (IBC) is under strain, with concerns about delays, judicial interventions, and deviations from its original intent.
Insurance Sector of India
Context Chairman and MD of state-owned General Insurance Corporation of India (GIC Re), says the biggest problem for the insurance industry is fraud. Challenges faced by the Sector Low Penetration: With an overall insurance penetration rate of 3.7 per cent, below the global average of 7 per cent, there is a notable gap in coverage that presents opportunities for insurers to expand their reach. Claims Settlement Issues: Delays, rejections, and lack of transparency in the claims process create cus
India’s Financial Sector Reforms Need a Shake-up
India’s financial sector, particularly the Banking, Financial Services and Insurance (BFSI) space, is standing at a critical juncture. While reforms have been ongoing, there are still structural problems that need to be addressed.
Reviewing Priority Sector Lending (PSL) Norms
As Indias economic structure evolves, the Priority Sector Lending (PSL) framework requires a comprehensive review to address emerging challenges and opportunities.