Paper short abstract:

The paper aims at assessing financial development of South Asian economies, discussing similarities and differences between their financial systems, and assessing impact of financial sector development (inclusive financial inclusion) on sustainable development in the region.

Paper long abstract:

Most South Asian countries began introducing far reaching reforms to the financial sector in in the early 1980s. The reform packages usually included greater competition in the banking sector, improved accounting standards, partial liberalization of capital flows, and strengthening the supervisory framework. Financial sector reforms have contributed to higher domestic savings, increased inflow of foreign capital, and faster economic growth. Changes in financial sector have also deepened economic integration in South Asia, and enabled the region to overcome the effects of the subprime crisis. Yet the financial reforms in South Asia are far from complete. Even India, that has been most successful in the introduction of financial reforms in the 1990s, shows deficiencies in financial supervision and privatization of the banking sector. Moreover, there are still disparities in the level of financial development, and financial cooperation in the region is limited. The proposed paper is meant to characterize the level of financial development of the South Asian economies, discuss similarities and differences between their financial systems, and assess possible contribution of financial sector development (inclusive greater financial inclusion) to sustainable development of the region.