In India, since the formal announcement of the first initiative of financial sector reform in the Union budget of 1991–92 to the Second Report of the Narasimham Committee in 1998, considerable ground has been covered in putting in place a financial system which can meet the requirements of a more competitive and open economy.
By and large, financial reforms in India have proceeded in four major directions. First, setting the policy conditions right and removing the operational constraints of the financial system.