Financial Sector includes financial institutions such as commercial banks, investment banks, stock exchange and foreign exchange market.The following reforms were initiated in this sector:

1. The banking sector was opened for the private sector. This led to an increase in competition and expansion for services for consumers.
2. RBI's role underwent a change from a 'regulator' to a 'facilitator'.

These reforms were much needed and subsequent to these changes, this sector has witnessed tremendous growth and helped in the development of the economy as a whole.