Regulation and reform of the financial sector in India : an analysis of the underlying incentives

It then describes the financial sector deregulation initiated by the Indian government since 1992 and analyzes the new incentives that are likely to develop. Using this analysis, the paper explains the causes of the financial crises that followed rapid financial deregulation in nearly a dozen countries. While highlighting the dangers of this process, the paper explains how to deregulate India"s banking sector safely and successfully using a controlled, cautious, and gradual approach. (Author abstract, modified)