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The document summarizes the evolution of India's financial system from pre-liberalization to post-liberalization. Before liberalization, the system was highly regulated by the government with most banks being state-owned. There were strict entry barriers and controls on foreign investment. After liberalization in the 1990s, the system transitioned to being market-driven with private players entering banking, insurance, and other sectors. Regulations were simplified and foreign investment was encouraged, leading to a more efficient and developed financial system.
The document summarizes the evolution of India's financial system from pre-liberalization to post-liberalization. Before liberalization, the system was highly regulated by the government with most banks being state-owned. There were strict entry barriers and controls on foreign investment. After liberalization in the 1990s, the system transitioned to being market-driven with private players entering banking, insurance, and other sectors. Regulations were simplified and foreign investment was encouraged, leading to a more efficient and developed financial system.
The document summarizes the evolution of India's financial system from pre-liberalization to post-liberalization. Before liberalization, the system was highly regulated by the government with most banks being state-owned. There were strict entry barriers and controls on foreign investment. After liberalization in the 1990s, the system transitioned to being market-driven with private players entering banking, insurance, and other sectors. Regulations were simplified and foreign investment was encouraged, leading to a more efficient and developed financial system.
Finance, ASU To make a historical account of Indian Financial system before and after liberalization; To appreciate the evolutionary process for having attained the present phase; To T evaluate l t each h componentt off th the system t iin a global context; and To loot at your business decisions in the context of prevailing financial system of a state. Most banks were state-owned B k pension Banks, i ffunds d andd insurance companies were forced to buy State Issued bonds - primary investment. B b St Bombay StockkEExchange h g was closed market. Run by Brokers for the benefit of its members. There was no right governance and regulation. There was no single derivative market. All financial transactions were controlled by the RBI and Ministry of Finance Strict entry barriers in every Big Villains were sub-industry sub-industry. MRTP act, 1969 Difficult to start a bank, a The Capital Issues (control) act, mutual fund, a brokerage 1947 firm, an insurance company, fund a securities Indian Companies Act, 1956 a pension fund, exchange or sub-broking Industries Act, 1956 firm. Foreign Exchange Regulation Act, Foreign firms were restricted 1973 to touch any one of these parts Comprehensive capital control and restrictive leg slat o s legislations Look at a typical bureaucrats of yester years. Male , Balding head , Ugly stained metal rimmed glasses . Thick bushy eyebrows[Usually as a mono-brow], Mustache[See [ pictures], p ], No beard.,, Paan Chewing g [ The teeth and tongue are often discolored]. “I-don't-care-what-you-say, I'll-do-it-only-my-way” attitude. Drinking coffee 10 times a day. Looking for a slightest opportunity to take bribe. bribe Take home salary is Rs. 5000[Official] + Rs. 25000[Bribes and Misc. tips]. Taking the rules and law by word and not understanding the true essence of it. Even though the laws usually date back to the 1850 British Colonial period . No respect for anyone's privacy. Not taking anyone's ideas on improving productivity even though they are right. Piles and piles of paper with folders and gem-clips strewn about. A rotary dial telephone on the desk.. No air-conditioning and a ceiling fan that rotates 6 times in an hour. Runs errands for his bosses or chats with family during work. Also misuses official equipment. Is usually in a vital position of authority/ In a position that requires interaction with people everyday. www.sriraminhell.com Market driven All players with integrity and accountability Innovators and Creators flourish Contributes favorably to the Economy No greedy g y Global but not taking external shocks State facilitates rather than suppresses Eighteen to Three – Banking Regulation Act S h d l d IIndustries Scheduled d ti simplified i lifi d Eight Hundred to Fifty – Security Exchange SSI Board constituted MRTP not active Foreign Exchange Capital Issues Act Management Act – repealed passed Foreign Exchange Company’ss Act – subject Company Regulation Act repealed to scrutiny Insurance, Banking Private players allowed Industries open its gates to do insurance and for Private Players banking business MNC allowed SEZs opened FDI encouraged Lender's L d ' risk i kh has ddwindled i dl d substantially Liquidity position is improved Return is certain on his savings (either fixed or variable) Lender gets impetus to save He will get accurate information from specialized financial institutions. Lenders botheration with respect to selecting a prompt borrower is reduced Borrower certainty in rising funds is soared He needs make less effort and minimum time in questing for an ultimate lender. In whatsoever fashion he needs funds he can procure He can seek professionals and specialized assistance from specialist in the field. 1. Banking financial institutes (RBI, Commercial banks and co-operative banks) 2. Development banks (all India financial institutes like IDBI, IFCI) 3. Investment financial institutes (LIC,GIC,UTI, since 2000 Private insurance companies like SunLife, Allianz Bajaj, ICICI Prudential etc. ) 4. Non-Banking financial institutes (SBI capital services,, Merchant banking g companies p Hire- purchase companies, etc.,) 5. Postal department Financial services ((Recurringg deposits, p , NSC,, KVP,, Postal Life- Insurance etc.).