INDIAN FINANCIAL SYSTEM

CIA-1A

Title: Comparison of Indian Financial System with Switzerland Financial

System

Submitted By:

Aryaman Chatterjee (2020604)

Prateek Suri (2020624)

Reega Verma (2020652)

S Jaishivani (2020654)

Rishabh Jain (2020690)

Submitted To:

Prof. Saklesh

School of Business and Management Studies

1
 FINANCIAL SYSTEM

The financial system permits the transfer of funds among creditors and borrowers. India's
financial machine is led via way of means of the insurance, banking, capital markets, and
extraordinary provider industries. As a result, by collecting surplus money and successfully using
it, a financial system plays a vital role in a country's economic growth. This system controls the
flow of money between the people of the country and those with the ability to invest properly for
the mutual benefit of both parties.

FEATURES OF INDIAN FINANCIAL SYSTEM:

 It is essential for a country's financial prosperity.

 It helps in both saving and investing.
 It helps in the formation of capital.
 It helps in risk allocation.
 It facilitates the development of financial markets.

FINANCIAL SYSTEMS OF INDIA & SWITZERLAND:

CONSTITUENTS OF INDIAN FINANCIAL SYSTEM:

1. FINANCIAL INSTITUTIONS

Financial establishments function mediators, linking buyers and debtors to hold the economic
machine jogging smoothly. Financial establishments additionally help individuals, organizations,
and governments with an extensive variety of difficulties, from restructuring to diversification
initiatives. They offer an extensive variety of offerings to businesses wishing to make bigger
their operations.
2. FINANCIAL MARKET

A country's economic machine is made of economic markets and institutions. Financial

markets are the essential systems for economic offerings together with currencies,
checks, financial institution deposits, bills, bonds, and different securities and credit score
instruments.

FUNCTIONS:

• To enable credit and liquidity generation and allocation easier.

• Act as a mediator for the mobilization of resources.
• To contribute to the process of balanced economic growth.
• To make financial life easier.
• To meet the various credit needs of the commercial houses.

3. FINANCIAL INSTRUMENTS

Documents that represent financial claims on resources are referred to as financial instruments.
As formerly stated, a monetary asset is a declaration at the compensation of a described amount
of cash left on the give up of a precise term, plus hobby or dividend. A bill of exchange, a
promissory note, and a treasury bill are all examples.

4. FINANCIAL SERVICES

“Activities, advantages, and satisfactions related to the switch of cash that deliver customers and
clients with economic associated value," according to the definition of financial services. Banks,
financial institutions, and non-banking financial enterprises are the primary sectors of the
financial services sector.
 FINANCIAL SYSTEM OF SWITZERLAND

1. FINANCIAL INSTITUTIONS & MARKETS

The financial sector is highly developed and varied, and each subsector has its own set of
prospects and hazards. A small amount of global banking and insurance players, a large and
numerous insurance sector, numerous pension funds, nearby financial institutions serving the
house market, a number of private banks focusing on wealthy individuals, and remote places
banks worried in asset finance and financial advice make up the system.

2. FINANCIAL MARKETS

Although huge off-balance sheet exposures make it difficult for employees to gauge sensitivity
to shocks from foreign financial markets, large banks are worthwhile and nicely funded, and that
they have state-of-the-art threat control mechanisms in place.

3. SUPERVISORY & REGULATORY FRAMEWORK

The supervision device is green and has these days been enhanced. The SFBC and the FOPI have
strengthened their supervision of banks, securities markets, and insurance in terms of every first-
rate and quantity, with a focus on number one institutions and a greater dangerous approach.

4. SYSTEMATIC STABILITY, TRANSPERACY & INTEGRITY

External auditors and self-regulatory businesses play a crucial element within the supervisory
process, given the massive wide variety of monetary establishments and the distinctly small
length of the 2 supervisory authorities. The SFBC is aware of the dangers of outsourcing on-
internet internet site on-line artwork. The 9/11 assaults highlighted the importance of fee gadget
aid in instances of crisis.
 1. EXIM POLICY OF INDIA

REGULATION: Exim policy in India is governed by the Foreign Trade Development and
Regulation Act, 1992, which aspires to make India a global trade and commerce powerhouse.
The Ministry of Commerce and Industry's Directorate General of Foreign Trade is the
government body in charge of foreign trade policy, which is a set of instructions for the import
and export of products and services. The policy is notified for a five-year period and amended
annually on March 31st, with the new plan taking effect on April 1st.

PRIMARY OBJECTIVE: The primary objective of the policy was to improve India’s export
performance while encouraging foreign trade and aiming to create a favorable balance in the
net exports position of the country.

KEY HIGHLIGHTS OF EXIM POLICY: The Indian EXIM policy over the years has
evolved with a change in dynamics of international trade.

 The export target set by the ministry is of US$900 billion by the year 2019-20, including
the export of merchandise and services.
 E-Governance and Digitization of Processes has been a major step taken by the
government in order to foster trade. Online facilities have been created to upload
profiles of importers and exporters, online communication facilities with the Ministry
of Corporate Affairs and other DTGF communities etc. and online filling of various
business-related documents and applications are implemented. The policy allows for
paperless trade in order to quicken operations and save resources. The requirement of
a digital signature while uploading Bill of Entry is a must.
 The government's main objective was to bolster "make in India" by reducing the Export
Obligation (EO) for domestic contracts under the EPCG scheme from 90 to 75 percent, to
encourage domestic assets procurement. The government's other goal is to link
procedures. Two new reward schemes for exporters: Merchandise Exports in India
Scheme and Service from India Scheme have been introduced for exporters based on %
of realized FOB value or net foreign exchange earned respectively.
  To promote diversification of exports in all sectors and provide an appraisal
mechanism to reduce trade imbalance.

IMPACT OF EXIM POLICY IN INDIA

 Globalization of Indian Economy: The purpose of the Exim Policy 1997-02 was to lay
the groundwork for the globalization of the Indian economy. The policy's very first goal,
which declares, demonstrates this.
 Impact on Agriculture: The Exim Policy 1997-2002 took a number of positive steps to
aid the Indian agriculture economy. These measures include permitting EOUs and other
units in EPZs in the agricultural industry to pay duty on 50% of their production in the
domestic tariff area and granting an extra SIL of 1% for agro product exports (DTA).
 Impact on Self-Reliance: One of India's long-term aims of self-reliance is successfully
accomplished through the Exim Policy 1997-2002. This has been achieved through the
Exim Policy, which encourages the use of domestic raw materials in order to build a
strong local industrial base. Exporters have benefited from new incentives included in
the Exim Policy.

IMPACT OF COVID-19 ON INDIAN EXIM POLICY: Due to COVID-19, Indian EXIM rates
fell in April 2020, with exports and imports falling by 60% and 59 percent, respectively,
prompting the government to prolong the policy duration for another 6 months, till September
30, 2021.

EXIM POLICY OF SWITZERLAND

REGULATION:
The Swiss economy, which benefits from an open industrial product trade regime, is highly
globalized. The free-trade Treaty of 1972 represents nearly 4 fifths of the import of goods and
2/3 of exports with the EU. Switzerland, as part of the EFTA, has signed 12 favorable
agreements since 1991, with countries of Central and Eastern Europe and the Mediterranean,
with a view to ensuring conditions of access comparable to those of the European Union.
Despite its open borders, Switzerland remains a high-cost destination. Many retail prices in the
United States are unfavorably compared to those in neighboring markets, owing to strong
agricultural protection and low internal competition for a variety of goods and services. Market
entrance has long been hampered by "private" or "informal" barriers resulting from a legacy of
inadequate anti-cartel laws, specific and protective technical regulations, certain investment
restrictions, and intellectual property exclusive rights.

PRIMARY OBJECTIVE: The main goal of the policy was to improve India's export
performance, foster foreign trade and create a positive balance in the country's net export
position, while avoiding the misuse of the country’s export and import prowess.

EXPORT POLICY: With $285 trillion in exports in 2017, Switzerland is the 18th largest world
export economy. Germany, the United States, China, India and Hong Kong are Switzerland's
primary destinations for exportation. During the last five years, exports have increased 0.4
percent annually. Precious materials like gold, chemical products like packaged medicines,
human blood and plastic are also being exported. Where the State Secretariat of Economic
Affairs has authority to refuse to export all goods if it believes to be used to build, manufacture
or use radiology weapons or if its nature can threaten regional and global security.

IMPORT POLICY: With imports totaling $273 billion in 2017, Switzerland is the world's 17th
largest import economy. Germany, the United States, Italy, the United Kingdom and France are
the major importers in Switzerland. In the last five years, imports have fallen by 2 percent
annually. An extensive process of approval and proper labelling of all biotechnical ingredients
and ingredients arising from a biotechnological product is required for the import of biotech feed
or animal feed products. Special health certificates on animal products imported into Switzerland
must be stamped by certain authorities in their country of origin. Depending on the mode of
delivery, any items that are imported must be disclosed within a certain period. The item must be
declared within 24 hours if imported by road; 48 hours when imported by river; 7 days when it
has been imported by train; and 7 days when the item has been imported by air. Switzerland
imported
279.2 billion dollars of goods in 2018. 63.1% of such imports are made from other European
countries, 20.7% from the US. Switzerland imported 279.2 billion dollars of goods in 2018.
Other European countries account for 63.1%, Asian countries make a contribution of 20.7%, and
8.8% are planned for North America.

IMPACT OF COVID-19 ON SWISS EXIM POLICY: The Swiss economy experienced a loss
of trade of CHF 14 billion for exported goods as compared to 2019 from mid-March until end
July, due to COVID, with a loss of CHF 15 billion for imported goods. With substantial
reductions in both import and export, in all other sectors, particularly in chemicals and
pharmaceutical industries, product biodiversity could help prevent further losses.

2. FISCAL POLICY OF INDIA

The government of India uses this policy to determine how much it should spend to keep its
economic cogs turning smoothly. Fiscal policy has recently become more important in India and
around the world in order to achieve rapid economic growth. One of Indian government's key
fiscal policy objectives is to achieve quick economic growth. Fiscal and monetary policies are
critical in the management of a country's economy.

MAIN OBJECTIVES OF FISCAL POLICY IN INDIA:

 Economic growth: In order to achieve certain economic goals, fiscal policy supports
maintaining a rate of economic growth.
 Price stability: This policy regulates the country's levels ensuring that when inflation
becomes too high, prices can be controlled.
 Full employment: As a mechanism for recovering from low economic activity, it tries to
reach full employment, or near full employment.
IMPORTANCE OF FISCAL POLICY IN INDIA:
 The fiscal policy enables considerable resources to be mobilized to finance its many
projects via taxes.
 Fiscal policy also helps to boost the savings rate.
 The fiscal policy provides the private sector with enough incentives to grow its operations.
 Tax policy aims to reduce the discrepancy in income and wealth distribution.

IMPACT OF COVID ON INDIAN FISCAL POLICY: Taking a look at the essential

components of the economic situation in India, we can see that our finance minister, due to the
COVID-19 epidemic, has lowered the fiscal deficit to 6.8% of GDP in FY 21, down 9.5% in the
FY 21. Estimates are Rs 34.83 lakh crores on budget for 2021-2022.

FISCAL POLICY OF SWITZERLAND

Unlike most of the other countries, Switzerland's fiscal systems have distinguished them through
broad-based intergovernmental relations with fiscal consciousness at all levels of government,
direct community organizing rights including cantonal and local fiscal elections and special
constitutional or statutory fiscal limitation to avoid excessive public debt. The fiscal constraint
reduces budget deficits substantially. The lower the share of local expenses is, the lower the total,
cantonal as well as local expenses and revenues.

MAIN OBJECTIVES OF FISCAL POLICY IN SWITZERLAND:

 Economic sustainability: Fiscal policies helps in stabilizing the economy to ensure
smooth working of the financial sector.
 Accelerating the rate of economic development: The Swiss want their country to flourish
and reach their goal at a faster pace. Applying fiscal policies will help them achieve this
goal.
 Full employment: As a mechanism for recovering from low economic activity, it tries to
reach full employment, or near full employment.
IMPORTANCE OF FISCAL POLICY IN SWITZERLAND:
 In a country like Switzerland with never-ending economic and financial opportunities,
fiscal policies have helped boost the economy making it one of the best economies in the
world.
 Fiscal policies have helped Switzerland grow sustainably towards a healthier and
prosperous future in terms of finance and economy.
 Switzerland did not suffer a lot during the COVID due to the fiscal policies playing its
role in stabilizing the economy.
 The Swiss economy is a small, landlocked economy and these policies are helping it
become bigger and better.

IMPACT OF COVID ON SWISS FISCAL POLICY: Switzerland was hit hard during
COVID. If Switzerland enters the V-shaped (big recession and fast recovery) recession, SECO
estimates that GDP in 2020 will decrease by 7 percent and unemployment rate will rise to 4
percent (from
2.3 percent in 2019). The Deloitte survey shows that nearly a simple fraction of Swiss workers
(63%) have seen a negative impact: over 1/2 those staff have had to scale back their hours,
twenty- sevenths have had overtime cut, pure gold has lost their annual leave, and a couple of
having lost their jobs.

3. NATIONALISATION OF BANKS

Nationalization of Bank is the way toward moving a bank held by the private area into the public
hands of a public government by buying a larger part shareholding (more noteworthy than half).
Nationalization of banks endeavors to control bank administrations for the government
assistance of the country also, in a straightforward way. Nationalization in India might be
followed back to 1947, frequently known as the pre-autonomy time frame. India's monetary
framework was set up during this time. Numerous banks, as Allahabad Bank and Punjab
National Bank, begun tasks in those days are still dynamic at this point. Bank consolidations
were normal during this period, with most of banks blending with each other. The subsequent
stage, which started in 1947 and finished in 1991, saw most of India's banks nationalized. Indira
Gandhi, the Prime Minister at that point,
made a proposition for sake of the focal government, and the Government of India started giving
the Banking Companies (Procurement and Transfer of Undertakings) Ordinance in 1969.
Parliament sanctioned the Banking Organizations (Acquisition and Transfer of Undertakings)
Act after around 14 days. Barely any banks, such as Allahabad Bank, Bank of Baroda, Bank of
India, Bank of Maharashtra, Canara Bank, Punjab Public Bank, UCO Bank, Union Bank of
India, were nationalized thus. Punjab and Sind Bank, Oriental Bank of Commerce, Corporation
Bank, Andhra Bank, New Bank of India, what's more, Vijaya Bank were among the six business
banks nationalized in 1980. The public authority controlled around 91% of the nation's financial
industry after the second period of nationalization.

Though in setting of Switzerland, one of the world's biggest monetary emergencies hit the
country. They're at present building up the norm for bank guideline. The Swiss had more
motivation to be worried than the remainder of the world during the 2008 monetary emergency.
Switzerland's banks, driven by Credit Suisse and UBS, controlled 680% of the nation's resources.
Gross domestic product of a country (looked at to 70 percent for business banks in the United
States). Regardless of Today, Switzerland is a stone in the middle of an overall tempest. Capital
is filling the country, including, indeed, Swiss banks. It's a major cry from the US, where the
Federal Reserve is siphoning cash into an unstable banking and contract industry that gives no
indications of recuperation. What's more, not normal for some other Eurozone countries, there
`was never any worry that Switzerland would not be able to reimburse its commitments. The
public authority also, national bank of the country were more dynamic and responsive than
others. During the respite going before Lehman Brothers' breakdown in September 2008, the
Swiss were working diligently on a procedure to manage dangerous resources at UBS, the most
vulnerable of Switzerland's issue banks—with an equilibrium sheet multiple occasions the size of
the entire Swiss economy—When the monetary emergency hit, the national bank nationalized
some of UBS' resources while recapitalizing the rest. Conversely, experts in different spaces of
Europe and the United States delayed for as long as possible to set up complex bailouts that left
many concerns inexplicable. Swiss banks should likewise have extra money available to turn
away bank runs, and they were among quick to accept new CEO pay and extra guidelines in
2009, which were broadly seen as a motivating force to face exorbitant challenges. To that point,
specialists have proposed new laws expecting banks to isolate their exercises into various
segments that may be exchanged on account
of an emergency without sinking the mother transport, a practice that a few banks, like Credit
Suisse, are now attempted.

IMPACT OF NATIONALIZATION

POSITIVE IMPACT:

The financial framework in India has gotten more proficient because of bank nationalization. The
public's confidence in banks was likewise improved subsequently. Small-scale industry and
horticulture, which had been failing to meet expectations, gotten a lift. This brought about an
ascent in funds and, accordingly, an increment in India's monetary advancement. Bank
nationalization additionally brought about more noteworthy bank entrance. This was generally
saw in India's country regions. During the 1970s, net homegrown saving as a level of public pay
almost multiplied. Bank stores as a level of GDP expanded from 13% in 1969 to 38% in 1991.
Moreover, from 13.9 percent in 1969 to 24.1 percent in 1990, the gross speculation rate
expanded. The commitment of headways to GDP expanded from 10% in 1969 to 25% in 1991.
In India, banks were at this point not limited to metropolitan or cosmopolitan regions

ADVERSE CONSEQUENCE:

The nationalization of banks has brought about the financial area's loan cost structures turning
out to be progressively muddled. Changing sorts of advances had diverse loan costs. The
financial business fostered an administrative attitude because of bank nationalization. Inside the
public area banks, there was no obligation, responsibility, or inspiration for it to progress. Inside
these banks, outlandish postponements had gotten the new standard. Late obligations and the
development of financially unviable branches are turning into a worry for nationalized banks.
Stretching out advances to farming and small-scale businesses has demonstrated to be a
hazardous undertaking as it had given lesser returns. Banking is a profoundly aggressive area. Be
that as it may, the nationalization of banks had diminished the rivalry between the public banks
and private banks.
 4. CENTRAL BANK OF INDIA

The Reserve Bank of India (RBI) is India's national bank, which was made under the Reserve
Bank of India Act on April 1, 1935. The Reserve Bank of India is responsible for dealing with
India's money and credit frameworks and utilizes money related strategy to keep up with
monetary steadiness. The RBI's essential objective is to perform thorough monetary area
management in India. The RBI has found a way ways to change bank assessments, carry out off-
site reconnaissance of banks and monetary organizations, and work on the job of inspectors. The
bank's administration objective is to keep costs stable and guarantee that credit comes to useful
financial areas. The Reserve Bank of India (RBI) was nationalized in 1949. The bank's chiefs
have consistently been chosen by the public authority. The RBI's present need is on keeping up
with more prominent monetary organization guideline while likewise managing legitimate
difficulties like bank extortion and solidified bookkeeping.

The Reserve Bank of India (RBI) is responsible for directing the banking and monetary
frameworks in India. The bank manages financial stockpile, inspects monetary files like GDP,
and chooses on the plan of rupee banknotes. It will probably keep up with public confidence in
the framework and to shield contributors' inclinations. All planned banks' banking accounts are
kept up with by the RBI. The National Housing Bank (NHB) was established in 1988 to
empower the acquisition of the private land. The Reserve Bank is responsible for the country's
global cash saves, which permits it to manage emergencies in case of a dry season.

IMPACT OF COVID 19: Central banks are playing a huge role in improving the economies of
nations worldwide. The Central Bank of India has taken several measures to boost the economy
amidst the second wave of the COVID 19 pandemic. The RBI has introduced measures to
facilitate lending to COVID 19 related businesses, especially in the health sector. There is a 500
billion rupee ($6.78 billion) facility established by the Reserve Bank of India (RBI) for the
above. The Reserve Bank of India (RBI) has declared that certain small debtors will be permitted
to prolong their repayment period, and has made changes to assist India's micro, small, and
medium-sized firms. Moreover, the RBI has announced certain relaxations in overdraft facilities
by states and has also excused certain KYC compliance requirements. Thus, RBI is playing a
necessary part in reviving the nation’s economy from the pandemic crisis.
 CENTRAL BANK OF SWITZERLAND

As an independent central bank, the Swiss National Bank (Schweizerische National Bank)
oversees the country's monetary policies. Constitutionally and statutorily, it is required to act in
the country's best interests. As a result, its major objective is to maintain price stability while
taking economic trends into account. Creating a favorable atmosphere for economic growth is
the result of this policy decision. Bank of Switzerland (SNB) is responsible for monetary policy
and issuing Swiss Franc banknotes. While taking economic changes into account, its primary
purpose is to ensure price stability. The SNB is governed by specific rules and has two
headquarters, one in Bern and one in Zurich. In 1906, the Swiss National Bank was established.
The bank is one of the world's major financial institutions. The bank was granted legal
independence from the Swiss Confederation in May 2004. Since 1981, it has been researching
banknote design. Its current chairman is a former Federal Credit Union president. The Swiss
National Bank seeks a monetary strategy that is in the country's best interests. Monetary policy
has a long-term impact on output and prices since it is based on inflation expectations rather than
current inflation.

IMPACT OF COVID 19: For organizations affected by COVID-19, the federal government,
commercial banks, FINMA (Swiss Financial Market Supervisory Authority), and the SNB
worked together in a way that had never been done before. As a result of government guarantees,
the banks processed applications and disbursed the cash, and the SNB put up a refinancing
facility to complement the COVID-19 lending program. Moreover, with the help of SNB,
reallocation of capital became easier for banks in places where it was most necessary.
Furthermore, SNB is focusing on big data and machine learning technology to ease and
modernize its banking and finance sector which would surely help in the revival of the nation’s
economy. Thus, SNB is acting as an efficient crisis manager amidst the pandemic to help the
Swiss economy defend the blows of the ongoing pandemic crisis.
 5. REGULATORY TECHNOLOGY

RegTech is a type of technology that enables businesses to quickly adjust to the pressures of
growing regulatory obligations while being cost-effective and secure. Companies will be able to
automate the process of data monitoring and reporting to regulatory agencies using this
technology. Using data analytics, all reporting can be done in real-time. As a result, RegTech
bridges the current gap in the regulatory landscape.

INDIA

India's recently established e-governance efforts, such as the "Digital India" campaign, aim to
convert the country into a digitally empowered society and knowledge economy, altering
numerous sectors in previously unimaginable ways. The digitization of India's financial industry
has resulted in the emergence of a range of technology-driven financial and insurance products
known as "Fintech" and "RegTech. “The RBI has announced that it is upgrading its traditional
off- site supervision and reporting mechanism, which was based on pre-defined data collection
templates that were prone to inaccuracy and errors (known as a "feedback system," where
regulators are notified of an event after it has occurred), to a state-of-the-art AI and ML run
system that securely extracts specific data sets directly from financial institutions. India's
economy is booming, and investments and acquisitions are increasing regularly. Noncompliance,
on the other hand, can have serious consequences in terms of monetary loss, reputational
damage, and other factors As a result, it is vital for organizations of all sizes to deploy regulatory
technology and, as a result, be empowered to handle rules, manage risk, and improve overall
operations. When it comes to investing in and implementing RegTech, the focus should be on
compliance and fraud prevention.

SWITZERLAND

Switzerland is seeking innovation to optimize financial processes. The country was ranked
number one in the Global Innovation Index 2019 and has been banks’ haven for decades To stay
at the highest of the money world, Associate in Nursing lead the business towards an innovative
future,
Schweiz has been finance in FinTech, and slowly warming up to RegTech. Nation created a
hospitable startup scheme for inventive entrepreneurs, and down taxes to draw in innovative
ideas from all round the world, securing for itself the title of an Eco innovation hub. Indeed,
Switzerland is home to a slew of startups, including several RegTech firms like Net Guardians,
which specializes in AI fraud protection, Apiax, which provides digital transaction tools, and Fin
Form, which provides compliance services. The financial sector in Switzerland is becoming
increasingly reliant on technology. Surprisingly, even though RegTech is on Switzerland's radar,
banks are hesitant to embrace it openly. However, the majority of banks consider Switzerland's
regulatory structure to be adequate and do not believe it needs to be strengthened total
digitalization of the sector as necessary, aside from establishing a legal basis for digital identity.
Switzerland's cautious interest in RegTech follows global trends: even though RegTech's
popularity is growing, only 14 per cent of global jurisdictions have implemented RegTech
solutions, with another 27% exploring it. The RegTech revolution is still in its early stages, but it
appears to have a bright future ahead of it. In their paper on computing in RegTech, Chartis
analysis reports that seventieth of surveyed corporations have already used AI in risk and
compliance.

In the midst of a pandemic, when fear is more contagious than anything else and traditional
solutions are failing, the green light is given to creativity. With the world's order turned upside
down, society is desperate to embrace new possibilities, and those who serve meaningful
innovation on their menus may fast develop economic empires.

6. MONETARY POLICY

SWITZERLAND

A money market committee reviews the Swiss National Bank's (SNB) monetary operations on a
weekly basis. According to the SNB's website, the bank has the option of reacting to unforeseen
developments such as large swings in the currency rate and money demand. Changes in note
circulation or the government's sight deposits account at the SNB cause deposits to differ
significantly from the expected pattern of their target level. According to the Bank of Canada,
fine-
tuning operations may be used to counteract sharp moves in money market rates. The Swiss
National Bank (SNB) left its policy rate and the interest rate on sight deposits at minus 0.75%—
the world’s lowest. Moreover, the Bank highlighted its continuing temperament to intervene in
interchange markets, because the Swiss franc remains extremely valued. However, the SNB
softened its language, stating it might intervene “as necessary”, as critical the last meeting in
Dec, once it aforementioned it might intervene “more strongly”. The move by the Swiss National
Bank was intended to encourage economic activity in the face of the persisting Covid-19
pandemic, avoid undesirable appreciation of the Swiss franc, and increase pricing pressures—
consumer prices decreased for the thirteenth month in a row in February in annual terms.

INDIA

The Reserve Bank of India (RBI) regulates the supply of money in the economy through interest
rate regulation. Its main goal is to achieve significant economic growth while maintaining price
stability. The goal is to increase investment productivity by limiting non-essential fixed
investment. The Reserve Bank of India's (RBI) monetary policy refers to the central bank's (RBI)
policies on interest rates, money supply, and credit availability. The Reserve Bank of India (RBI)
manages inflation in the country through monetary policy. RBI achieves its goal by employing a
variety of monetary instruments such as the REPO rate, reverse RERO rate, SLR, and CRR,
among others. The Reserve Bank of India (RBI) uses open market operations and bank rate
policy to regulate money flow in the economy. In the Indian economy, these instruments are
employed to control the money supply. They have an impact on bank reserve positions,
government bond yields, and bank lending costs. The Reserve Bank of India (RBI) uses the
credit ceiling as a tool for credit regulation. Commercial banks will be hesitant to advance loans
to the general population under it. The increase in the repo rate and reverse repo rate is a sign of
policy tightening.
In the current pandemic, The Indian monetary policy response has been to reduce the repo rate to
4.4 percent. It conjointly slashed the reverse repo rate to three.75 per cent to discourage banks
from parking cash with the depository financial institution of Asian nation (RBI) and encourage
them to present out loans instead.
 7. STOCK MARKET

STOCK MARKET CAPITALIZATION:

India Stocks on the BSE rallied, boosting India's stock market capitalization to $3 trillion.
Meanwhile, the BSE Sensex is trading 4% below its peak, with the largest stocks pulling it
down. Despite pandemic concerns and localized curbs affecting sentiments, India's current
market value is at *218.05 trillion, an increase of $30.01 trillion or $42.01 billion this year. The
market capitalization of BSE companies rose by *11.03 trillion or $19.62 billion in May alone.
In December 2020, Switzerland's market value represented 218.2 percent of its nominal GDP, up
from 209.3 percent in December 2019. In Dec 2000, the data reached its highest level ever of
271.5
% and reached its lowest level ever of 127.0 % in Dec 2008. SIX Swiss Exchange calculates
Market Capitalization as a percentage of Nominal GDP using monthly Market Capitalization and
monthly Nominal GDP. CEIC calculates Market Capitalization as a percentage of Nominal
GDP.

STOCK MARKET RETURN:

India's stock market return (%, year-over-year) was 17.02 % in 2017. 2017's latest value is 17.02
percent. 88 countries were used to calculate the average world rate in 2017.Between 2008 and
1997, Swiss growth averaged 7.57 percent with a minimum of -22.86 percent and a maximum of
44.37 percent. From 2017 to date, the value was 10.9 percent. 88 countries were used to calculate
the average world rate in 2017.
STOCK PRICE VOLATILITY:

A minimum of 12.76 percent was recorded in 2017 and a maximum of 43.74 percent in 2009.
The average rate was 23.54 percent. From 2017 we have a value of 12.76 percent.
Comparatively, the world consumption growth rate in 2017 was 14.66 percent based on 86
countries. Nifty and Sensex data were collected. Volatility was at its peak during the 2008
economic recession. Flows of stocks in Switzerland at specific time frame are the indicators of
volatility in a stock. The volatility in a given stock was 13.76 in 2017. It is not uncommon for
stocks with the highest volatility to fluctuate up to several hundred percent per day. The volatility
of the developed markets tends to be lower, rarely exceeding 20-30% during quiet periods.

IMPACT OF COVID 19: The pandemic has severely impacted the various economies around
the globe including the major ones. Despite the 2nd wave the Indian Stock Market has been
immune towards it. Even though, the economic activity has suffered a lot, the equity market has
been resilient. Both Nifty and Sensex have seen strong weekly gains and the market is on a
bullish trajectory. Decline in Covid cases in most developed nations along with a lack of
nationwide lockdown and steady pace of vaccination has helped India to be at a low risk amidst
the second wave. Even though Switzerland faced challenges in the early 2020s the market soon
saw a recovery. The nation has been able to offset some of its effects by providing loans to
numerous firms and allowing many employers to qualify for short-term working compensation,
and giving them an option of work from home. The government expects a steady and positive
growth in the market and the economy in the year 2021 but has warned that the emergence of
new COVID 19 variants could pose as a threat.
 CONCLUSION

In the previous two decades, India's financial sector has experienced a radical transformation,
moving from physical banking to digital banking. In India, technological developments have
transformed the Indian financial system, increasing consumer trust, increasing profitability, and
making it stricter and fairer for everyone. Fintech technology like Policy Bazar (for insurance
policies), Rupay (card payment network), and BharatPe (for payment transactions) along with
the new digital payment system E-Rupi (a digital prepaid voucher) has become the latest trend in
the financial sector. Along with this, RBI has also taken several reforms to upgrade and make
banking safer and more efficient. However, there are certain weaknesses in the financial system
like the dominance of government finances, higher interest rate, unethical financial practices,
lack of coordination among financial institutions, etc. Furthermore, the pandemic has drastically
affected the country in the last year however the OECD expects Indian GDP to rise by 9.9
percent in 2021, making it the fastest-growing G20 country. Indian investment must also return,
according to The Economist, in order for India to recover from Covid-19 and for concerns about
a probable solvency problem among state-run banks to subside.

Switzerland has one of the most well-developed financial industry which contributes to its stable
and positive economy. The Swiss financial center focuses chiefly on the management of wealth
and technological innovation which has made it a universal role model. Approximately 10
percent of Europe's fintech industry is based in Switzerland, primarily in the city of Zurich. The
low financial risk and high level of secrecy associated with Swiss bank accounts are well known.
There are also some disadvantages to banking in Switzerland, such as high regulatory costs and
declining profitability. Furthermore, according to the IMF, Switzerland was successful in
handling the COVID 19 crisis but it still could have done far better with the resources available
to the economy. Nevertheless, India which is a developing economy could definitely take certain
pointers from the innovative and superbly developed Swiss financial sector to transform into a
more sound and positive economy.
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