The financial sector plays a pivotal role in the economic growth of a country. To meet the growth aspirations of India, it needs to be highly efficient and effectively regulated. However, presently it is facing innumerable challenges. The economic slowdown of developed countries has affected the flow of funds making it highly volatile and uncertain. The banking sector crisis is also looming large with rising NPAs and emerging requirement of meeting Basel III standards. The absence of a well developed corporate bond market has further exacerbated the situation constraining the credit availability for the corporates and large infrastructure projects adversely affecting the growth of the country. At the other end of the spectrum the MSME and agricultural sector despite being considered as priority sector continues to largely depend upon informal lenders with high borrowing cost. In this backdrop, it has become imperative that India push for next generation reforms to ensure it sustain its growth rate and emerge as economic superpower.