The main target of financial legislation is to adjust the legal relationship among financial supervisors, institutions and customers, protect customers’ legitimate rights, and strengthen the supervision on those areas where market plays a leading role in coordinating financial supervision and market selfdiscipline. Where there is market, there is risk, which is also the same for the financial sector.
The underlying objective of these reform measures is to avoid the dependence on taxpayers’ money to bailout financial institutions in the event of stress. Indian position 16. Being a bank dominated economy, a healthy banking sector is imperative for India’s economic growth. RBI has been proactively working towards development of a strong and efficient banking system through its regulations.