The solution may be for the regulators to use the analytical tools developed by the market participants themselves for risk and performance assessment. Regulators already have begun to move in this direction.
Notwithstanding the rapid developments in the Indian capital markets, the share of banking credit to firms and households taken together as a percentage to total credit at above 90% continues to remain high in comparison to that in advanced economies like France (around 50%) and USA (around 30%).