gaziantep escort gaziantep escort
Banking Sector Reforms in India - Sehpaathi

Banking Sector Reforms in India

(A) FIRST PHASE OF BANKING SECTOR REFORMS / NARASIMHAN COMMITTEE REPORT – 1991:-Dear Aspirants
Here is a post which defines banking sector reforms in India. Banking in India has seen many reforms from time to time, with giving the new banking license as a new banking sector reform. here is a small material on Banking sector Reforms in India

To promote healthy development of financial sector, the Narasimhan committee made recommendations.

RECOMMENDATIONS OF NARASIMHAN COMMITTEE :

  • Establishment of 4 tier hierarchy for banking structure with 3 to 4 large banks (including SBI) at top and at bottom rural banks engaged in agricultural activities.
  • The supervisory functions over banks and financial institutions can be assigned to a quasi-autonomous body sponsored by RBI.
  • Phased reduction in statutory liquidity ratio.
  • Phased achievement of 8% capital adequacy ratio.
  • Abolition of branch licensing policy.
  • Proper classification of assets and full disclosure of accounts of banks and financial institutions.
  • Deregulation of Interest rates.
  • Delegation of direct lending activity of IDBI to a separate corporate body.
  • Competition among financial institutions on participating approach.
  • Setting up asset Reconstruction fund to take over a portion of loan portfolio of banks whose recovery has become difficult.

Banking Reform Measures Of Government:-

On the recommendations of Narasimhan Committee, following measures were undertaken by government since 1991:-

  1. Lowering SLR and CRR: The high SLR and CRR reduced the profits of the banks. The SLR has been reduced from 38.5% in 1991 to 25% in 1997. This has left more funds with banks for allocation to agriculture, industry, trade etc. The Cash Reserve Ratio (CRR) is the cash ratio of a banks total deposits to be maintained with RBI. The CRR has been brought down from 15% in 1991 to 4.1% in June 2003. The purpose is to release the funds locked up with RBI.

Read More [wpdm_package id=’3718′]

Interview Preparation

[do_widget text]

sehpaathi

Disqus Comments Loading...

Recent Posts

Current Affairs For 19th & 20th November 2023

Hola! If you haven't heard this quote yet, take a moment to read it here.…

4 months ago

Current Affairs For 18th November 2023

"Think good an good follows. Think evil and evil follows. Think creative and creativity will…

4 months ago

Current Affairs For 17th November 2023

Better late than never! Apologies for the delay in responding, but I'm here now to…

4 months ago

Current Affairs For 27th October 2023

By providing accurate information, context, promoting critical thinking, raising awareness, connecting global and local issues,…

5 months ago

Current Affairs For 25th & 26th October 2023

Current affairs coverage often showcases stories of individuals and communities making a positive impact. Q1.…

5 months ago

Current Affairs For 24th October 2023

Current affairs coverage helps individuals understand the interconnectedness of global and local events. It shows…

5 months ago