Indian regulators claim top spot

Tue, 3 Jun Pre-Open

   Previous Close   

   09:30 am   

   11:30 am   

   01:30 pm   

   Closing   

It has been over 23 long years that India had opened gates to liberalization and globalization. This was way back in 1991. India has come a long way with respect to the economic reforms since then. And the financial sector has gradually developed to support growth and build a strong economy. The financial markets in India have grown considerably. That is from approximately Rs 6,500 bn in 2001 to Rs 61,000 bn in 2012. That is almost 10 times in a span of a decade.

Financial markets stand core to the development of the economy. However, the recent 2008 global turmoil has shown that the financial markets can be epicenter of the crisis too. And it can drag the economy to an abyss. India has learnt these lessons well. And the economy has stood resilient across economic cycles!

And that's well corroborated by a recent global study. The study suggests that India has scored top rankings for a sound and regulated financial market. The assessment of policies, regulations and responsibilities related to financial market infrastructures has revealed positive results. India has claimed the top spot. Indian financial markets have outshined even the giants like U.S. and China. The financial regulators here have received worldwide acclaim.

That's commendable! And we cannot thank the Central Bank more. For the remarkable contribution of the Reserve Bank of India has made it happen. The regulatory push towards development of financial markets has strengthened the system. Prudent risk management has been always on the radar. Be it bond markets or capital markets! The regulators have been quite proactive in building the framework for financial and macro-economic stability. Even the banking system has evolved from its good old days. It is reaching out today to the financially excluded population. India has many laurels to its credit.

But the scope for improvement always remains. The need for an efficient financial market cannot be overemphasized. And India is an emerging market. It has already witnessed a paucity of resources. That has impacted the economic recovery too. Moreover, India's financial markets are yet to match the size and sophistication of the global counterparts. Hence, a cautious approach towards development is always advisable.

Economy and markets are intrinsically related. Will efficient financial markets lead to a stable economic recovery? Share your views on Equitymaster Club.