In a market economy, to implement appropriate competition and regulatory policies for the benefits of the nation, political and other implications should be given lower priorities. However, as the political and other interferences in economic activities are significant in developing countries, non-economic factors could not be ignored easily.
The purpose of the study is to enhance knowledge on the main theme area by contributing to the literature. The proposed topic will examine two major issues namely, the level of financial regulation in each South Asian country and whether the existing level of regulation in each country is contributing positively/negatively towards competitive financial market activities in the region. It is a fact that financial market in any country is not able to function itself efficiently without some regulations. Therefore, regulations are part of the financial system. However, common belief is that when the regulations are higher, the level of efficiency is lower in financial markets. This will be the issue that is going to be tested.