The Financial System Design Initiative (FSD) within Dvara Research aims to build and further the vision of a well-functioning financial system for India that is built on three fundamental pillars: High Quality Origination, Orderly Risk Transmission, and Robust Risk Aggregation.

India is a very large and diverse country and therefore no one strategy, however well-designed, can be uniformly effective in serving the entire country. There is, therefore, a need to move away from a limited focus on any one model as being the solution, to an approach where multiple models and partnerships are allowed to emerge – between national full-service banks, regional banks of various types, non-banking finance companies (NBFCs), and financial markets, as well as a whole range of new functionally differentiated participants that can be envisaged to be created to fill existing gaps. In other words, the financial architecture must seek to encourage the emergence of specialists and enable greater partnerships between specialists. We, therefore, envisage a policy framework that encourages multiple provider strategies and institution types– whether new or old– to thrive based on their inherent strengths, and together efficiently serve the financial needs of a large and diverse economy. Our mandate is to undertake research around extant and emerging themes, gaps, and risks in financial sector policy, and recommend regulatory responses, keeping in mind the need to increase meaningful financial access and depth in a manner that enhances systemic stability.

Since 2008 when Dvara Research was founded, the Financial Systems Design Initiative has made several contributions to the Indian financial system and participated in strong formal engagements with financial sector regulators and the Government of India. We were the technical secretariat to the SEBI Working Group on the Social Stock Exchange (Chair: Ishaat Hussain, 2020) and the RBI Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households (Chair: Dr. Nachiket Mor, 2014). We formally contributed through membership or in our capacity as domain experts to a number of other Committees such as the RBI Expert Committee on SMEs (Chair: U.K Sinha, 2019), the RBI Committee for Medium Term Path to Financial Inclusion (Chair: Deepak Mohanty, 2015), the RBI Committee on Household Finance (Chair: Dr. Tarun Ramadorai, 2016) and the PFRDA Committee to Review Implementation of Informal Sector Pension. Dvara Research has also undertaken evaluations of the Indian Government’s pension program for informal sector workers as well as of the Pradhan Mantri Mudra Yojana, commissioned by the PFRDA and the Ministry of Finance respectively.