India And China Banking Reform In A Comparative Study

India and China took the banking system reform nearly at the same time as two big important countries in the world. This article is to focus on the initial condition, the main reform measures and road choices and final outcome up to today. What we are doing is to hope give India and China, those two emerging countries a lot of good experiences, especially for China. The banking system reform began in India and China from the period of 1980s and 1990s.In the past, both India and China made planning economy not market economy as the main method in their national economy development. At first there are a lot of things that may be made deliberately, such as that banks had less money and cash to deal with by there own; the government placed great pressure on the interest; there existed so many barriers on the road for the private and foreign banks to come into the market. It must be kept in mind that it is difficult to move forward for their business of banking reform and both India and China got a lot of achievement according to their different state conditions. We can easily find that there are several stages in the process of banking reform of two countries. But we all know that India's reform is different from Chinese banking changes: At the beginning China did not know clearly what will happen next and India made clear goals for there banking reform. On the issue of access to private and foreign banks, India let private banks be in first, then most of the foreign banks are allowed to be in the domestic market; but China made those two stages reverse. Now we can see both two countries made great progress just like followings: the banks have performed better than did they do in the past can undertake more financial risks than before. there are also some shortcomings for our banks. For example, people and government in two countries cost a lot for the banking reform and the banks can not meet the demands of the people. At last, there are some implications for both two countries especially for China such as more creation; more competition; deepening reform and more legal rules for our market environment.