Financial regulations distort normal functioning of a financial system through various channels. When these systems are reformed/deregulated on the lines of liberal markets, there will be structural adjustments and these adjustments will in turn cause various market/economic forces to behave on the lines that are expected in a liberal free market system. The focus of this study is to show how financial regulations impact structural elements of a financial system. In this study we analyze the impact of financial reforms that took place in India beginning in 1991on the structural aspects such as size, competitiveness, efficiency, geographical spread interest rates etc.) of the financial system. In the last part of our paper we show how structural changes in the financial market changed corporate structuring behavior of corporate firms. As reforms effected major changes, firms had to adjust their capital structure in response to the changes occurring in the financial system.