Indian Financial System
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Code : FCF0019
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Region : India
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Introduction:Financial reforms of the 1990s were initiated with an objective to eliminate the financial despotism and create an efficient, productive and profitable financial sector. The Economic reforms best describe the post-1991 consequences of various economic practices, as it ushered in substantial transformation and liberalization of the Indian financial system. In November 2009, India purchased 200 tonnes of gold valued at Rs $6.7 billion (Rs31,380 crore) from the International Monetary Fund(IMF) . RBI bought nearly half of the gold sold by IMF under the latter's limited gold sales programme. By purchasing the gold, RBI now has more gold than the European Central Bank, thus becoming the 11th largest gold holder among various Central Banks, marking a remarkable turnaround from the crisis of 1991, when India had to airlift its gold to pledge for a loan. In 1991, when India faced its worst ever balance of payment (BoP) crisis, it had no alternative but to pledge 67 tonnes of gold to the Union Bank of Switzerland and Bank of England to raise a loan of $605 million. It intended to shore up its dwindling foreign exchange reserves, which were at a low of $1.2 billion in January 1991... |
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