At an international level, the regulation of globally significant financial institutions has been at the core. Overall, these reforms are headed in the right direction. Yet concerns are being raised that the regulatory system is becoming too complex and thus less transparent. This makes it necessary to focus on the key principles of regulatory reform.
A qualitative change was brought about in the legal framework by the enactment of the Foreign Exchange Management Act (FEMA) in June 2000 by which the objectives of regulation have been redefined as facilitating trade and payments as well as orderly development and functioning of foreign exchange market in India. The legal framework envisages both the developmental dimension and orderliness or stability.