Similarly, it has been possible to invoke prudential regulations over RBI regulated financial institutions to effectuate best practices in financial markets, though the legal compulsion as a regulation on all market participants may not be possible; the example of successes achieved are dematerialisation of Commercial Paper and Demateralisation of Debt instruments, brought about in the requirements on Banks and financial institutions.
There could also be use of incentives to conform though legal or formal regulation may be difficult. Examples relate to valuation and accounting norms being performed by a self regulatory organization and adopted by banks and proposals relating to information sharing with Credit Information Bureau pending legislative initiatives. A deliberate decision may be taken not to use regulatory powers, thus enabling development of markets.