Ex-RBI Governor M Narasimham Is No More

IAS Learning App

  • Narasimham was known for being the chair of two high-powered committees on banking and financial sector reforms.

First Narasimham Committee Report: Presented in 1991. 

  • Recommended the creation of a four-tier banking structure with three large banks on top.
  • Introduced the concept of rural-focused banks such as local area banks. 
  • Proposed a phased reduction in banks’ mandatory bond investment and cash reserve limits so that banks lend money for other productive needs of the economy.
  • It introduced the concept of capital adequacy ratio and proposed the abolition of the branch licensing policy.
  • Concepts of non-performing assets classification and full disclosure of accounts were also recommended by the first committee.
  • Through reregulation of interest rates, it brought in greater competition among banks.
  • The committee introduced the concept of an asset reconstruction fund to take over bad debts.

Second Narasimham Committee Report- 1998

  • It is better known as the Banking Sector Committee.
  • It was told to review the banking reform progress and design a programme for further strengthening the financial system of India.
  • The committee focused on various areas such as capital adequacy, bank mergers, bank legislation, etc.

Source : The Hindu

Post a Comment
Please enter your name
Please enter your email
Please write your comments

Related Articles

IAS Learning App
Smart Kitchen Project

The Kerala government has announced the introduction of a Smart Kitchen project, which is meant to modernise kitchens and ease the difficulty faced by homemakers in household chores.

IAS Learning App
Sub Categories Under MGNREGA

The Union Finance Ministry has asked the States to split wage payments under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme into separate categories

Best Android Apps for UPSC civil services
The Draft Cinematograph (Amendment) Bill 2021

The draft was recently released by the Centre. It seeks to amend the Cinematograph Act of 1952.

Top Civil Service Coaching
Indemnity Clause And Covid Pandemic

Amid an acute vaccine crisis in the country, India is expected to grant indemnity to foreign vaccine makers including Pfizer and Moderna which would make it easier for their Covid vaccines to come to India.

Best Android Apps for UPSC civil services
Performance Grading Index (PGI) 2019-20

The Government has introduced the Performance Grading Index with a set of 70 parameters to catalyse transformational change in the field of school education.

Best IAS online Coaching

The system -- SUPACE which is short for Supreme Court Portal for Assistance in Courts Efficiency -- was inaugurated by the CJI in an event held virtually and attended by judges from several High Courts of the country

learning Radius App

Embrace the smartest way of learning with us

Best learning app for your UPSC civil services, Kerala Administrative Services and other exams from India’s Upmost Educators.

Learning Radius App