Banking Sector and Liberalization in India

Abstract

ABSTRACT

The Indian financial system is going through major changes as we know bulk of changes have been carried out by our government such as Jan Dhan Yojna, Digital India, Demonetization, ceiling on cash transactions, etc. The future can be analyzed by the history and basic nature of the economy and the banking sector has been stagnant. Various reforms have been rolled out regarding the banking sector since the early nineties. Allowing foreign banks, deregulation of interest rates, decreasing bank rates and SLRs, etc. are some crucial steps to impart functional autonomy and efficiency in Indian banking to make the sector competitive. After almost three decades it is crucial to analyze the how banking sector is performing after the reforms and how it is impacting on the economy. The present paper will throw light on trends of the real rate of interest, investment, credit growth, and working of money multiplier. Banking habits of people are still not much modernized and the use of currency is higher in the economy.