Description

A liberalized financial system lay emphasis on resource mobilization in contrast to investment. The formal sector mainly includes treasury administration, commercial banks, development banks, and savings organizations. The informal sectors of the modern time are the non-banking institutions, both of financial and non-financial nature. The informal sector plays a significant role in mobilizing savings and channelizing credits. There are apparent distinctions in the structure and function of the formal and informal sectors.

To strengthen the financial system of our country, the union government has formulated various committees and implemented their recommendations. These committees are Chakrabarty Committee, Vaghal Committee, Kalyan Sundaram Study Group, Narasimham Committee, Basu Committee, Dave Committee, Shah Committee, etc. The ongoing financial reforms are the product of the critical analyses and recommendations derived from them.