As the Indian financial sector started undergoing extensive liberalization in the 1990s, important lacunae started emerging in the regulatory and supervisory environment, which was inherited from the earlier decades of a highly regimented financial sector. To identify these shortcomings and suggest improvements, the government of India appointed two committees—the High Powered Expert Committee on Making Mumbai an International Financial Centre (2007) and the Committee on Financial Sector Reforms (2009). These two committees made a number of far-reaching suggestions and the primary purpose of this paper is to critically appraise these recommendations, especially in the light of the lessons for financial sector oversight emerging from the recent global crisis. In particular, the paper argues that three of the suggestions advocated by these committees viz. (i) the shift to a principles-based regulatory system, (ii) integrated supervision of all financial trading activities and (iii) divesting the central bank of its bank supervisory responsibility, need to be approached with considerable circumspection in the Indian context. The paper also stresses the importance of maintaining the independence of regulators and supervisors from government interference on the one hand and market influence on the other.