2  BIS Review 135/2008  The financial sector is too bank-centric, and the outreach and growth of the Non‐Bank Finance Companies and the Insurance sector have languished in recent years. NBFCs face direct competition from banks and are not likely to grow significantly until their funding sources and costs are streamlined.
At the same time, growth in the insurance sector is weak, and private pension funds have only recently started to gather some pace. The insurance sector is unlikely to grow unless it gets an infusion of innovation and efficiency. This may require privatization and possible breakup of the dominant state-owned company.