Role of Banks in Development of Financial Markets

In the times of Global financial crisis, we have been a testimony to the fact that Indian Banking is relatively robust and it was able to sustain itself in all this turmoil. But can we afford to be complacent? Or should we be initiating preventive measures to safeguard against such crisis in the future?
The objective of the Indian Banks is to create deep and efficient financial markets based on strong fundamentals. Banks are now focusing on product innovation and ways of increasing liquidity in the markets, especially the rural sector. We have seen in recent times that the Central Bank has made money market operations more flexible, reduced banks’ capital reserve ratio and also eased rules for some foreign borrowing. Plans to introduce new instruments in the money market and the G-sec market are also on the horizon. The RBI has already permitted banks to take trading positions in Interest Rate Futures(IRFs). Being exchange traded, it is transparent and ensures better price discovery . Currently, we are in a very interesting phase and it would be exciting to know the new initiatives our Banking system is contemplating. The path breaking FOFM 2010 Summit, where all the financial market leaders congregate, will be an exciting opportunity to know the plans, the agenda, the roadmap, and concisely, to know what is store for Indian Economy..