In the technology industry, vapourware describes ambitious projects that are delayed, scaled back, or never released. Cost overruns, unrealistic targets and technical bottlenecks are common causes. Some eventually overcome the label. Bluetooth, for instance, was once dismissed as vapourware before becoming a global standard. Others do not. Apple's Copland operating system was abandoned before it ever reached the market.
Indian financial sector reform may seem an unlikely comparison. As one former policymaker recently observed, India’s reform express has delivered landmark changes such as the Insolvency and Bankruptcy Code, the nationwide Goods and Services Tax (GST) and the recent Jan Vishwas decriminalisation initiative. Even within finance, the state has transformed the consumer experience through the JAM trinity of Jan Dhan, Aadhaar and Mobile, alongside the rapid expansion of UPI.
Yet, one category of reform remains conspicuously absent: the deep institutional plumbing that underpins a resilient financial system. This is not for lack of ambition. Over the past decade, policymakers have attempted at least three major reforms, each of which stalled before implementation, creating what might be called financial policy vapourware.
The first was the Financial Data Management Centre (FDMC). Conceived under the Financial Stability and Development Council (FSDC), it would have had statutory authority to collect data from every major financial regulator, including the RBI, SEBI, IRDAI and PFRDA. That, in turn, would have given the FSDC a genuine 360° view of systemic risks across the financial system. A technical committee even drafted the legal framework, yet the proposal went no further.
The second was the Public Credit Registry (PCR), proposed by then RBI Deputy Governor Viral Acharya in 2017. Drawing on international models, it envisaged a single, comprehensive database covering the credit histories of both individuals and companies. The PCR was also intended to integrate information from SEBI, the Ministry of Corporate Affairs and the GST Network, creating richer borrower profiles. The RBI established a high level task force, which submitted its recommendations in 2018, and even shortlisted technology vendors. Despite this groundwork, the project never materialised.
The third was the Financial Resolution and Deposit Insurance (FRDI) Bill, introduced in Parliament in 2017. It was designed as a dedicated insolvency framework for financial institutions, distinct from the IBC. Rather than maximising creditor recoveries, its focus was on containing contagion, and preserving confidence during a financial crisis. However, public anxiety over the proposed "bail in" provisions, which were widely interpreted as allowing deposits to be converted or written off, led to the Bill's withdrawal. No comparable legislation has since emerged.
Missing Incentives
Each initiative involved substantial preparatory work, including expert committees, stakeholder consultations and, in some cases, draft legislation. Yet none translated into lasting policy. What linked the FDMC, PCR and FRDI Bill was that each sought to reduce financial risk. The FDMC addressed systemic risk across institutions and markets. The FRDI Bill focused on tail risks arising from the failure of financial institutions. The PCR, while presented primarily as a solution to information asymmetry between lenders and borrowers, would also have given supervisors a far clearer view than the existing privately run credit bureau system.
This helps explain why these proposals struggled while headline reforms such as the IBC and GST succeeded. Major reforms require support from governments, regulators, consumers and the private sector. They often falter when stakeholders perceive few immediate benefits or are inadequately compensated for the costs of transition. Banks strongly backed the IBC because it helped them resolve stressed assets worth billions of rupees. GST involved difficult adjustments, but state governments received compensation from the Centre during the transition.
Financial risk mitigation enjoys no such constituency. When a financial crisis is prevented, there is no visible success to celebrate. The value of a systemic risk database or an effective resolution framework becomes obvious only when their absence magnifies a crisis.
Technology vapourware can sometimes be rescued through redesign, improved execution or adoption by competing firms. Financial sector reforms do not enjoy that luxury because governments and regulators hold a monopoly over policymaking. The FDMC, PCR and FRDI Bill were never vanity projects. They were intended to become essential institutional safeguards against future financial instability.
The IMF's 2025 Financial Sector Assessment Program (FSAP) for India recommended creating a central database to monitor cross sectoral risks and establishing a financial resolution framework aligned with global standards, effectively reviving the case for the FDMC and FRDI in updated forms. The PCR, meanwhile, resurfaced as the National Financial Information Registry (NFIR) in the 2023-24 Union Budget, but remains unfinished. Policymakers will ultimately have to revisit, refine and implement these reforms. Financial risk may lack a political constituency, but it never disappears.
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