From Colonial Extraction to Financial Liberalisation: Analysing The Legal Transformations Endured by the Bankng Structure in India
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Date
2026
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NLUJAA
Abstract
The history of the economic transformation of India cannot be understood in isolation. It has to be understood while examining the evolution of banking reforms in India. From the period of colonisation, where trade regulations facilitated economic extraction, to the period of state-led developments in the post-independence era, till the period of financial liberalisation in the 1990s, banking reforms have continued to shape the economic structure of India. This dissertation thus examines how the aforementioned legal reforms and its subsequent legal frameworks which governed trade, currency and banking institutions, influenced India’s economic decline under colonial regime, and later contributed to its emergence as one of the world’s fastest evolving economies. During British rule, laws regulating trade, currency and banking institutions were primary structured to protect imperial interest. The banking standard set by the colonial government, specifically centralised the financial authorities, promoted export-oriented extraction and marginalised indigenous systems of commerce and finance. Therefore, the economic exploitation facilitated by these changes made during the colonial period were not only economic in nature, but legally institutionalised through various acts, charter-based covenant and regulatory control. Post independence, India tried to reclaim economic sovereignty via state regulation, nationalisation of banks and developmental financial policies which aimed at expanding credit access, thereby promoting economic inclusion. After 1991, the liberalisation reforms mark a significant transformation in the philosophy of banking regulation. There, there was a gradual shift from welfare-oriented state control towards private participation, market efficiency, global financial integration, and digital financial governance. Thus, this transition strengthened the position of India within the global financial market, meanwhile, raising significant legal concerns in relation to financial inequality, accountability of regulator, authorities, protection of public interest and elastic consideration of economic power. Thus, the study argues that banking law should not be treated merely as economic regulations, but as dynamic legal instruments, which shape economic structures, regulate access to capital and national economic sovereignty. Henceforth, adopting a legal-historical and doctrinal approach, this study aims to trace the evolution of banking law across the periods of colonisation, post-independence reforms, and financial liberalisation, meanwhile examining the legal continuity which connects these varied phases. The research addresses a significant gap in existing scholarship, since most of the earlier studies analyses colonial exploitation, banking reforms, and liberalisation from the economic point of view, without sufficiently examining the legal statutes, which enabled these transformations. Therefore, banking regulations have been placed as the core of the analysis, surrounding which the legal transformations revolve. Thus, this dissertation aims to bridge the gap between economic history and legal scholarship, providing a more integrated understanding of India’s financial evolution. At a time, where India has emerged as one of the fastest growing economies, with rapid growth in digital banking and increase in international financial participation, it becomes significant to understand the legal foundations of this banking structure. However, if India wishes to ameliorate it’s banking and financial structure to align itself within the global economy, its legal institutions should ensure financial inclusion, stability, accountability, additionally facilitating a more balanced global integration.
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Dissertation submitted to National Law University and Judicial Academy, Assam in partial fulfilment for award of the degree of MASTER OF LAWS/ONE YEAR LL.M. DEGREE PROGRAMME Submitted by Swagata Das SF0225044 2025-2026 End Semester Supervised by Mr. Saheb Chowdhury Assistant Professor