Asian Journal of Research in Business Economics and Management

The paper focuses on the impact of liberalization of the Indian economy and financial sector reforms on the operating environment and functioning DFIs in India by conducting an empirical research.

This is a non experimental research in which sample groups were used to find out the impact of liberalization on the functioning of DFIs. The research design used in this study is cross-sectional. The methodology used in this research was survey methodology and survey technique used was questionnaire construction. Four parameters were taken into consideration to study the impact of liberalization and financial sector reforms on DFIs namely effect on their functioning, basic objectives, operating environment and their relevancy in the post reforms period. Frequencies and one sample t test were used in the study.

The study concludes that it is a compelling challenge for the DFIs to survive in the changed operating environment. Liberalization has adversely affected the functioning of DFIs. The basic objectives of DFIs have been redefined and their relevancy is under question largely due to the reforms introduced in the financial sector.