Financial sector is the foundation of any economy and it accords enormously in the distribution and mobilization of resources. Financial sector changes have long been observed as a substantial part of the program for the change of policy in developing countries. One of the key purpose of the financial sector change is to assign resources effectively, mounting the return on investment and accelerate the growth of real sectors of the economy. Moreover, changes in financial sector were initiated by the government in early 1990’s in order to meet the challenges of complex financial structure.

Forex market reform: Forex market transformation took place in 1993 and the consecutive adoptions of current account exchanging were the peak of the forex transformation introduced in Indian market.

Cryptocurrencies: In India, crypto currencies are not formally appreciated, as virtual currencies saved in e-wallets can easily be hacked and users suffer the lack of option in case of any dispute or problem. Since 2013, RBI has been intimidating the users about the risk of dealing with virtual currencies that are unidentified. Moreover, finance ministry has launched a panel for studying the guidelines of virtual currencies.

Factors affecting financial system

  • Supply and demand factors.
  • Deprived of considering a counseling move towards rule making.
  • Digital and financial knowledge.
  • Demanding business economics.
  • Assisting public good investments such as unified payments interface (UPI), etc.

Solutions to improve financial sector

  • Establishment of an effective, creative and lucrative financial sector
  • Elimination of the previous existing financial deposits.
  • Allowing the procedure of price discovery by the resolution of interest rates in market that enhances the assigned competence of resources.
  • Delivering the functional and operational independence to institution.
  • Constructing the financial system for rising international competition.
  • Encouraging financial stability in the rise of domestic and external shocks.
  • Intensifying the foundations of the banking system
  • Reorganizing procedures, upgrading technology and human resource development
  • Changes in the structure in finance sector.


An official sandbox is an investigational oversight method for inventive services and products that do not comes into a current regulatory regimes or cut across conventional domain of regulators.

These inventions are enabled to function for a limited period of time at a limited scale to understand their effectiveness and implications, so that the best substitutes for instruction can be developed based on concerns that appears.

The sandbox is required to be designed to accept this combined consumer-centric lens through a single incorporated sandbox helping regulators of all four financial sectors.

The sandbox choice can be a great way to release inventions for huge public adoption, as a regulatory sandbox manages the twin objectives of fostering financial innovation and protecting consumer interests.

Financial sector growth: The financial sector of India experienced growth because of the following reasons:

The Indian financial sector (capital markets, insurance and banking) released up to new confidential players involving foreign companies.

The last year witnessed a substantial expansion and deepening of financial markets with the announcement of various new instruments and products in banking and insurance sector.

The new players accepted worldwide best practices and updated technology to provide a more refined range of financial services to business, retail and institutional consumers.

Financial sector regulators are too practical in enduring the new instructions and guidelines are  have been proactive in ensuring the new regulations and guidelines are more or less arranged with the development in the financial sector.

The resulting competition in the market brought in novelty, enhanced customer service and competence in the financial sector in India.