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Resilience of the Financial Sector

Improving access to finance is integral to India achieving sustained economic growth, inclusion, and elimination of poverty. The World Bank Group focuses on unlocking infrastructure finance, expanding housing finance, financing of MSMEs, broadening credit products, as well as supporting effective use of ICT through mainstreaming Fintech, e-platforms, and other innovations.  Select investments by the IFC and the World Bank support the government in addressing the systemic issue of stressed bank balance sheets that constrains bank financing. In particular, the IFC is expanding its Distressed Asset Recovery Program launched in 2015 to target larger corporate entities. The World Bank Group also partners in efforts to bring the underbanked and unbanked population into the financial system.

$ 1.00 billion committed (IBRD/IDA)

$ 0.48 billion disbursed

Commitments are the sum of amounts of financing that the World Bank has committed to support lending operations towards achieving the objective of (fill in title of objective). Disbursements are the sum of financing spent by operations towards achieving this objective.

Results indicators


  • National Rural Livelihoods Project

    The objective of the National Rural Livelihood Project for India is to establish efficient and effective institutional platforms of the rural poor that enables them to increase household income through sustainable livelihood enhancements and improved access to financial and selected public services. There is also no change in the components within the project. While there is no change in the indicators, result values have changed in the Result Framework due to the proposed scaling down of the project. Results framework has been revised to incorporate for extension of the project by a year. It is now proposed to shift the focus of the project implementation to the state level with all project components and eligible expenditures/investments within them, being available for financing at the state level. Consequently, the investments at the GoI level are being reduced. The role of the GoI will therefore be more in the nature of project coordination, limited technical assistance, disbursement and monitoring. As the total financing is reduced, funds have been reallocated between the components. More rigorous criteria for fund allocation to the participating States will be followed and a fully operational SRLM will be a precondition for a participating state to receive project funds. The disbursement schedule over the balance period of the project has also been modified. The Financing Agreement of the project will be modified to accommodate all the above changes and will form the basis for the implementation of the restructured project.

Knowledge Activities

  • Incentivizing Sanitation Uptake and Sustainable Usage through Microfinance : Endline Report

    According to the most recent joint monitoring program report for water and sanitation, sanitation coverage and usage has significantly progressed globally. The use of basic sanitation services has increased steadily between 2000 and 2015. India topped the world ranking in terms of the number of people still practicing open defecation, with almost 40 percent of the population having no access to sanitation facilities. Lack of improved sanitation can have disastrous consequences. The government of India (GoI) has shown strong commitment to improving sanitation, starting with the establishment of the Total sanitation campaign in 1999. This study proposes to shed light on innovative ways of increasing the uptake and usage of safe sanitation practices through a cluster randomized controlled trial designed and implemented in 120 Gram panchayats (GPs) in rural Maharashtra, India. The report is structured as follows. The authors begin by providing details on the context, and a detailed description of the interventions in Section 2. Section 3 outlines the research questions that the evaluation addresses, while Section 4 provides details on the evaluation design, including the power calculations and details on the study sample and data. Thereafter, they present the results in Section 5, starting with the main outcomes toilet uptake, toilet quality and toilet usage, followed by a discussion of observed mechanisms and concluding by targeting results and interactions with SBM(G). Section 6 provides a discussion of the findings and concludes.

  • India - Financial Sector Assessment

    Against the backdrop of important structural reforms and terms of trade gains, India recorded strong growth in recent years in both economic activity and financial assets. Increased diversification, commercial orientation, and technology-driven inclusion have supported growth in the financial industry, backed by improved legal, regulatory, and supervisory frameworks. Yet, the financial sector is grappling with significant challenges, and growth has recently slowed. Highnonperforming assets (NPAs) and slow deleveraging and repair of corporate balance sheets are testing the resilience of the banking system and holding back investment and growth. The largest banks appear sufficiently capitalized and profitable to withstand a deterioration in economic conditions, reflecting relatively solid capital buffers and, particularly for the private banks, core profitability that is strong enough to cover credit costs. There is a group of public sector banks (PSBs) where vulnerabilities seem highest; these banks would require additional capital under the baseline scenario and some would almost deplete capital buffers due to growing NPAs and provisioning needs if stress intensifies. Capital needs are manageable in the aggregate, ranging between 0.75 percent of GDP in the baseline to 1.5 percent of GDP in the severe adverse scenario. Much needed efforts are now underway to accelerate the process of NPA resolution. The various debt restructuring schemes introduced over the past years have had limited uptake, and agreement among lenders has been hampered by their uneven capacity to withstand losses. The RBI was recently empowered to direct restructuring cases to the insolvency process, with the potential for insolvency used to exert pressure on creditors to finalize debt restructuring agreements outside the court process. This new approach shows promise of further progress, but more needs to be done to ensure that the debt restructuring process gains traction: banks need additional provisions and capital buffers; corporates need to undergo sustainable financial and operational restructuring; and infrastructure for debt restructuring needs to be improved.

  • India - Detailed assessment of observance : basel core principles for effective banking supervision

    This assessment of the implementation of the BCP in India has been completed as part of the Financial Sector Assessment Program (FSAP), which has been undertaken by the International Monetary Fund (IMF) and the World Bank (WB) in 2017, at the request of the Indian authorities. The scope of the assessment is the scheduled commercial banks, and the assessment reflects the regulatory and supervisory framework in place as of the completion of the assessment. It is not intended to analyze the state of the banking sector or crisis management framework, which are addressed by other assessments conducted in this FSAP.

  • India - CPMI-IOSCO principles for financial market infrastructures

    The present document is the assessment of two Financial Market Infrastructures (FMI) operated by the Clearing Corporation of India (CCIL) in India – the Central Counter Party (CCP) and Trade Repository (TR); and the responsibilities of the authorities - against the Committee on Payments and Market Infrastructures (CPMI) and International Organization of Securities Commissions (IOSCO) Principles for Financial Market Infrastructures (PFMIs). The assessment was conducted through a country visit in the context of the India Financial Sector Assessment Program (FSAP) in March 2017. The information used in the assessment includes relevant laws, bye-laws, regulations, rules and procedures governing the systems, and other available material. In addition, extensive discussions were held with the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), CCIL and its participants. The reports produced as part of the CPMI-IOSCO Level 1 and Level 2 implementation monitoring exercises were used for the assessment of the responsibilities of the authorities. This assessment uses the methodology presented in the CPMI-IOSCO publication – Principles for financial market infrastructures: Disclosure Framework and Assessment Methodology (December, 2012).

  • India - Financial sector assessment program update : securities regulation - technical note

    This Technical Note examines India’s securities market and the regulatory system overseeing the securities market and market participants. It is based upon a mission to Mumbai, India from March 14 – 31, 2017, conducted as one component of a joint IMF-World Bank Financial Sector Assessment Program (FSAP). This Note updates a detailed IOSCO assessment that was conducted from June 15 to July 1, 2011 as part of an FSAP and published in August 2013. It examines the changes that have occurred in India’s securities markets since the last assessment and the changes that have occurred in the regulation of this market.

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