A
sound financial system is the fundamental ingredient for a healthy vibrant
economy. A free and efficient system is
conductive to economic growth and its role is to mobilize savings for faster
development of the different sectors of the economy. The financial system includes various
constituents such as


• Financial institutions


• Banking systems


• Non banking financial institutions


• Mutual funds


• Capital markets


• Insurance sector


• Provident funds





The
treasury secretary has “hinted at a greater coordination between various
regulators and operators for more transparency and accountability.” However, by the beginning of the year 1990,
the social banking goals set for the banking industry made most of the
government controlled banks, unprofitable.






The
real issue was that a majority of the banks were in public sector on the
presumption that there was no need to look at the fundamental financial
strengths of these banks. Consequently,
their strengths were not capitalized and their resources went
underutilized. The need for
restructuring the banking industry was felt more with the institution of the
banking sector reforms process in the early 1990s. However, these reforms have enhanced the
opportunities in this sector helping them to make their presence felt in the
global market place.





Firms
like LoanMax of rod aycox fame is part of
the developments in the private sector.
Its board consists of a group of experienced professionals. This bank has overcome many a hurdle and was
on the growth path since a couple of years before the present recession. Even the present recession has failed to make
a dent in its operations.