To quote a few important measures relating to market development and liberalisation, banks were allowed freedom to fix their trading limits, permitted to borrow and invest funds in the overseas markets up to specified limits, accorded freedom to determine interest rates on FCNR deposits within ceilings and allowed to use derivative products for asset-liability management purposes.
Thirdly, this is good news both for consumers (due to price gains) and for the financial system as a whole, as it becomes more resilient and efficient. And lastly, operating in this new environment, central banks, as well as supervisors, must become more flexible and facilitate innovation – while taking into account new challenges and constantly building new regulatory and supervisory know-how.