India must accelerate financial sector reforms and enhance private capital mobilisation to achieve its goal of becoming a USD 30-trillion economy by 2047, according to the World Bank’s latest Financial Sector Assessment (FSA) report.
The report, part of the joint IMF–World Bank Financial Sector Assessment Program (FSAP), evaluates the health and resilience of India’s financial system. It highlighted that India’s “world-class” digital public infrastructure and government-led initiatives have significantly expanded access to financial services for both men and women. However, it also called for greater efforts to increase account usage among women and improve access to a wider range of financial products for individuals and micro, small, and medium enterprises (MSMEs).
The FSAP is a mandatory assessment for countries with systemically important financial sectors, conducted every five years. India last underwent this review in 2017. The International Monetary Fund (IMF) releases the Financial System Stability Assessment (FSSA), while the World Bank publishes the Financial Sector Assessment (FSA) as part of the process.
According to the World Bank, India’s financial system has grown more resilient, diversified, and inclusive since the last assessment. Financial reforms over the past decade helped the country recover from the financial stress episodes of the 2010s and the economic shock of the COVID-19 pandemic.
The report praised India’s expansion of regulatory oversight to cooperative banks, stricter prudential rules, and restructuring of regulatory and supervisory departments for improved effectiveness. It also endorsed the Reserve Bank of India’s scale-based regulation for Non-Banking Financial Companies (NBFCs), while recommending further strengthening of credit risk management frameworks to enhance supervision.
India’s capital markets have also deepened, growing from 144% of GDP in 2017 to about 175% currently, supported by robust infrastructure and a diverse investor base. To sustain this momentum, the World Bank recommended developing credit enhancement tools, risk-sharing mechanisms, and securitisation platforms to attract more private investment and boost long-term growth.
The Finance Ministry welcomed the assessment, reaffirming India’s commitment to ongoing financial sector reforms to support its 2047 economic vision.
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