Economic buoyancy, credit growth, savings and investments. Each of these seems to have forsaken the Indian economy over the past year. The last two in particular have been the biggest shockers. True, there is some amount of cyclicality in economy and credit demand. However, at least the savings and investment rates in India had been healthy until 2011. But of late, these two have dipped steadily lower as a percentage of GDP. To begin with high inflation and negative real interest rates dissuaded retail investors from bank deposits. Stocks, debentures and mutual funds too gave jitters. Investors chose to stay away from mutual funds as a result of regulatory flux. All in all, gold and real estate emerged as the only inflation hedging asset classes. Going forward, however, the proposed changes in banking regulations could nearly nail the future of Indian financial sector. Basel III, if implemented in a hurry, could have telling effects on Indian banking. No doubt prudential capital adequacy norms are necessary. They can keep Indian banks free from the liquidity crisis in global markets. However, a hasty implementation could mean choking banks and the economy of necessary capital. This would not only impact GDP growth. But it would also take away investors from financial markets.