We envisage for the Indian financial system, a policy framework that allows multiple strategies and institutions, new and old, to co-exist with each other, enjoying the freedom to thrive based on their inherent strengths and weaknesses.
Dvara Research is committed to work towards its 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, such that there is full financial inclusion and financial deepening in a manner that enhances systemic stability. A well-functioning and resilient financial system needs a good mix of institutions that collectively meet the financial intermediation needs of the country, be it individuals, households, businesses, sectors and local governments, while simultaneously enhancing the stability of the system as a whole.
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. The financial architecture must seek to encourage the emergence of specialists and enable greater partnerships between specialists. We envisage for the Indian financial system, a policy framework that allows multiple strategies and institutions, new and old, to co-exist with each other, enjoying the freedom to thrive based on their inherent strengths.
Since 2008, when Dvara Research was founded, it has made several contributions to the Indian financial system. Dvara Research has participated in several policy-making platforms such as the Reserve Bank of India’s Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households (CCFS), serving as the technical secretariat to the committee. Dvara Research has also worked with the Government of India’s High Power Expert Committee on Urban Infrastructure and Services, and the Committee to Review Implementation of Informal Sector Pension. Dvara Research has been closely involved in the evolution of the pension product for informal sector workers (NPS-Swavalamban) and advises the Pension Fund Regulatory and Development Authority of India (PFRDA) on the same. We also organise and host the Financial Systems Design Conference, the proceeds of which are below: