Maintaining regulatory balance

Besides depositors, investors in bank securities are important stakeholders, and their interests ought to be safeguarded

The financial sector in most of the economies of the world, especially the emerging ones like India, is bank-dominated. Banks are crucial because they facilitate financial inclusion through their outreach, and play an important role in directing credit to desired sectors and help governments achieve various objectives.
 

The need for a differentiated regulatory architecture for banks is obvious. They operate on an extraordinarily high leverage ratio; are permitted to accept deposits from the public; and have the backing of the central bank as the lender of the last resort.

The masses have faith in the banking system. A