India should adopt American Financial System

In comparison to the USA/UK/EU, India has a far more corrupt banking system and structure then the big 3. In terms of Corporate Social Responsibility India most certainly falls into the greed (embezzlement/CFO smudging the books) unlike the others especially the US.

Trust in Banks ?

In the US, though, "trust in banks" isn't even a thing anymore. Federal Deposit Insurance is such a widely accepted principle of the American financial system that most American don't even consider whether their banks might collapse when they are choosing which bank to put money in. If the bank has FDIC, it's all the same: the bank's shareholders and bondholders can lose money, but the depositors certainly can't.

India is not an especially virtuous country. For example, in the "Corruption Perceptions Index," the USA had a score of 74 (making it one of the top 20 most honest countries - Denmark leads with 92) and India, with a score of 38, was ranked 82. That puts corruption in India at the same level as, say, Mexico or Colombia. Or, to use the "Global Corruption Barometer" (which surveys normal people instead of experts), 54% person of Indians reported having paid a bribe in the previous year versus only 5% in the US.

A good regulatory system needs to look at a weird idea and decide whether it is creative and exciting, or a scam. 

One way a regulatory system can be crappy is to say that all scams are just creative, and let them keep going. Another way a regulatory system can be crappy to say that all creative ideas are scams, and force them out of business. Neither system is a good one. 

The correct course steers through the middle, to maximize the benefits of getting rid of "scams" (increasing trust in the financial system, increasing the level of investments, minimizing the unproductive use of resources in hustling) and also to maximize the benefits of financial creativity (minimizing economic risk, maximizing the efficiency of spreading resources around the economy). The US (and UK and EU) systems might not be perfect, but the Indian system puts a huge amount of pressure on innovation (it's hard to do something new if every plan needs to be approved by five different bureaucracies) without doing anything serious to crack down on corruption.