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The other day high ranking U.S. and Indian economic officials met at the 2nd annual India-U.S. Financial and Economic Partnership. Attendees included India's chief economic advisor and head of the Indian reserve bank. The U.S. was represented by the Fed Chairman and the Exchange commission chairwomen. The purpose of the meeting is to discuss mutual regulatory policies. They discussed economic problems both countries are facing, as well as infrastructure investments needed in India, but no resolutions were passed. Nonetheless the meeting shows that both sides are eager to strengthen economic ties. Outside of the official meeting, Indian leaders worked to reassure American investors that the current economic slump was an aberration and that the economy was on the right track. Investors are still worried that the current leadership will not be able to pass the necessary reforms to allow the country to grow.

Indian Banking Emerged in the late 1700s but the oldest existing bank is the Bank of Bengal. During the American Civil War the US supply of cotton to Europe fell, so Indian Banks opened to finance trade with Indian cotton instead, but due to high speculation most failed. Since then until the 1900s banking was relegated to Europeans. In the 1900s India enjoyed relative stability and small banks popped up to serve ethnic and religious communities. After the Indian Independence, the government took measures to hold an active role in the economy, including the creation of a reserve bank, and various regulations. Then they nationalized the 14 largest banks so that the gov. could control credit. Only recently, in the 90's has the government started to relax its control on banking, allowing private banks to be established again, and this influenced a retail boom, and the economy has been strong since then. Now the banking system is considered quite mature. The Indian Fed reserve was established no that long after the US.

Wikipedia

Islam, Frank. "US investors seek hassle-free entry into Indian Economy." The Economic Times. 2 July 2011. <http://economictimes.indiatimes.com/news/economy/foreign-trade/us-investors-seek-hassle-free-entry-into-indian-economy/articleshow/9071165.cms>