Summing up, reforms were designed to enable the process of efficient price discovery and induce greater internal efficiency in resource allocation within the banking system. While the policy measures in the pre-1990s period were essentially devoted to financial deepening, the focus of reforms in the last decade and a half has been engendering greater efficiency and productivity in the banking system.
Reforms in the monetary policy framework were aimed at providing operational flexibility to the Reserve Bank in its conduct of monetary policy by relaxing the constraint imposed by passive monetisation of the fisc.