What are the recommendations of Narasimham Committee 1991?

The committee’s report was tabled in Parliament on December 17, 1991: The main recommendations of the committee are as follows:

Reduction in Liquidity Ratio:
Abolition of Directed Credit Programmes:
Free Determination of Interest Rates:
Improvements in Accounting Systems of the Banks:
Establishment of Special Tribunals:

Which one of the following is the subject of the Narasimham Committee report of year 1991 and 1998?

Directed Investment Programme : The committee objected to the system of maintaining high liquid assets by commercial banks in the form of cash, gold and unencumbered government securities. It is also known as the statutory liquidity Ratio (SLR). In those days, in India, the SLR was as high as 38.5 percent.

What was the recommendation of Narasimham Committee 2?

Two or three large Indian banks should be given international character. Small, local banks should be confined to States or cluster of districts in order to serve local trade, small industry and agriculture.

Who is the chairman of Narasimham Committee?

Maidavolu Narasimham
The Committee was set up under the chairmanship of Maidavolu Narasimham. He was the 13th governor of the Reserve Bank of India (RBI) from 2 May 1977 to 30 November 1977. There was another Committee, this time under P Chidambaram as the finance minister, headed by Narasimham, which was formed in 1998.

What is Narasimham Committee report?

The Narasimham-II Committee was tasked with the progress review of the implementation of the banking reforms since 1992 with the aim of further strengthening the financial institutions of India. It focussed on issues like size of banks and capital adequacy ratio among other things.

Why did Narasimham Committee decrease the CRR requirement?

The CRR is an impost on banks; which is why the Narasimham Committee on financial sector reform in the early 1990s had recommended that CRR be reduced to 3% and the statutory liquidity ratio (SLR), to 25%. The reason is that CRR is a handy, if somewhat gross, tool to mop up liquidity.

What did Narasimham headed?

M Narasimham was the first and only governor to be appointed from the Reserve Bank cadre. He headed two committees in 1991 and 1998 that had critical influence on the country’s banking reforms and set the agenda for the sector. The expert committee headed by Narasimham gave a series of recommendations in November 1991.

How can you say that Narasimham Committee recommendations are very much important for the development of banking sector?

The committee recommended that the government must reduce the SLR from 38.5% to 25% over the next five years. The cash reserve ratio must be reduced from 15% to 3-5%. So that the banks can use more funds for advancing loans.

What is Narasimham committee report?