May 20, 2024

Wealth Grow Pro

Economy in Focus, Profits in Sight

Catching Up With The Recent Developments In The Indian Financial System

4 min read
Indian Financial System 5th Edition (Paperback) By Bharti, Pathak

Introduction

The Indian financial system has seen significant developments in recent years, paving the way for a more robust and inclusive economy. These developments have not only transformed the way financial transactions take place but have also provided opportunities for individuals and businesses to access credit and other financial services more easily. In this article, we will explore some of the key recent developments in the Indian financial system and their impact on the economy.

Digital Payments Revolution

One of the most notable developments in the Indian financial system is the digital payments revolution. With the introduction of initiatives like Unified Payments Interface (UPI) and Aadhaar-enabled Payments System (AePS), digital transactions have gained immense popularity. The ease and convenience of making payments through mobile devices have made financial transactions faster and more secure, reducing the dependency on cash.

Financial Inclusion through Jan Dhan Yojana

The Jan Dhan Yojana, launched in 2014, has been instrumental in bringing millions of unbanked individuals into the formal banking system. Under this initiative, individuals were encouraged to open bank accounts with minimum documentation requirements. This not only provided access to banking services but also paved the way for the delivery of various government subsidies and benefits directly into the bank accounts of the beneficiaries, eliminating leakages.

Introduction of Insolvency and Bankruptcy Code

The Insolvency and Bankruptcy Code (IBC), implemented in 2016, has revolutionized the resolution process for stressed assets in India. The introduction of this code has provided a structured framework for the insolvency resolution of companies, ensuring a time-bound and efficient process. This has not only instilled confidence among investors but has also helped in reducing the burden of non-performing assets on the banking system.

Expansion of Payment Banks

Payment banks have emerged as a significant development in the Indian financial system. These banks, with their low-cost and easily accessible banking services, have played a crucial role in promoting financial inclusion. Payment banks have enabled individuals to open savings accounts, make digital transactions, and avail basic banking services even in remote areas where traditional banking infrastructure is limited.

Introduction of Goods and Services Tax (GST)

The implementation of the Goods and Services Tax (GST) in 2017 marked a significant milestone in the Indian financial system. This unified taxation system replaced multiple indirect taxes, streamlining the tax structure and making it more transparent. The introduction of GST has not only enhanced ease of doing business but has also contributed to the formalization of the economy by bringing many businesses into the tax net.

Strengthening of Regulatory Framework

The Indian financial system has witnessed a strengthening of the regulatory framework to ensure the stability and integrity of the system. The Reserve Bank of India (RBI), along with other regulatory bodies, has implemented various measures to enhance the supervision and regulation of banks, non-banking financial companies, and other financial institutions. These measures have been instrumental in maintaining the overall health of the financial system.

Introduction of Bharat Bond ETF

The introduction of Bharat Bond Exchange Traded Fund (ETF) in 2019 has opened up a new investment avenue for retail investors. This ETF allows investors to invest in a basket of government securities with different maturities. The Bharat Bond ETF provides retail investors with a safe and liquid investment option while also supporting the government’s borrowing program.

Boost to Start-up Ecosystem

The Indian financial system has also witnessed a boost to the start-up ecosystem with the introduction of various initiatives and funding mechanisms. The establishment of the Atal Innovation Mission, Start-up India, and Stand-up India campaigns has provided a conducive environment for entrepreneurship to thrive. Additionally, venture capital funds and angel investors have played a crucial role in providing financial support to start-ups, fostering innovation and job creation.

Expansion of Credit Access

The recent developments in the Indian financial system have also led to an expansion of credit access. With the introduction of initiatives like the Pradhan Mantri Mudra Yojana, individuals and small businesses have gained easier access to credit facilities. This has facilitated the growth of micro, small, and medium enterprises, contributing to employment generation and economic development.

Facilitation of International Trade

Efforts have been made to facilitate international trade by simplifying and digitizing trade finance processes. Initiatives like the introduction of the Trade Receivables Discounting System (TReDS) and the e-Sanchit platform have streamlined trade documentation and made it easier for businesses to access finance for international trade. These developments have not only reduced the time and cost involved in trade transactions but have also enhanced transparency and efficiency.

In conclusion, the recent developments in the Indian financial system have brought about significant changes, making it more inclusive, efficient, and transparent. The digital payments revolution, financial inclusion initiatives, regulatory framework strengthening, and other key developments have paved the way for a stronger and more vibrant financial system. These developments have not only benefited individuals and businesses but have also contributed to the overall growth of the Indian economy.

Copyright © All rights reserved. | Newsphere by AF themes.