meaning of financial sector reform some financial sector reform in context with banking sector

1. Question- What do you understand by
financial sector reforms? Elucidate
some financial sector reform in context
with the banking industry in India.

2. Presented By:
Priyanka Sahu
Roll no:-M4317007

3.  The financial sector is a category of the economy made
up of firms that provide financial services to
commercial and retail customers
 The main ingredients of the financial sector are Banks,
Financial Institutions, Instruments and Markets
 It mobilise the resources from the surplus sector and
channelize the same to the different needy sectors in
the economy.

4.  The basic objective of the reform process was to create
an efficient, competitive and stable financial sector to
stimulate economic growth.
 Initiated in the early 1990s on the recommendations of
Mr. M.Narasimham.

5.  The balance of payments that had threatened the
international credibility of the country and dragged it
towards the brink of default.
 The serious fear of insolvency threatening the banking
system which had concealed its problem for years with the
aid of defective accounting policies.
 The act of Government involving large scale pre-emption
of resources from the banking system to finance its fiscal
deficit.

6.  Relatively inadequate level of prudential regulation in
the financial sector.
 Inadequately developed debt and money markets.
 Obsolete and out-dated technological and institutional
structures that lead to the consequent inefficiency of
capital markets and the rest of the financial system.

7.  First Generation (Early 1990):- Ist Phase:
-Creating an efficient, productive and profitable financial
sector to function with operational flexibility and functional
autonomy
 Second Generation (mid 1990…):- IInd
Phase:
-Strengthening the financial system and introducing structural
improvements

8.  Banking Sector
 Monetary Policy
 Financial Markets
 Forex Markets

9.  The Indian Banking sector is an important constituent of the
Indian Financial system.
 The banking sector plays a vital role of promoting business in
urban as well as in rural areas in recent years.
 Without it India can not be considered as healthy economy
 For the past three decades India’s banking system has several
outstanding achievements to its credit

10.  The Narasimham Committee I appointed to restore the
financial health of commercial banks and to make their
functioning efficient and profitable
 Recommendation aimed at changes according greater
flexibility to bank operations
 The Committee submitted its report in November 1991
with 23 recommendations

11.  Reduction in SLR and CRR
 Minimum Capital Adequacy Ratio
 Non-Performing assets & Income
recognition norms
 Deregulations in Interest Rates
 Constitution of BFS
 Technological Development
 Banking Ombudsman Scheme
 Entry of Private Players
 Setting up of RIDF

12.  The committee placed greater importance on structural
measures and improvement in standards of disclosure
and level of transparency
 Recommendations of Narasimham Committee II

13.  Asset Liability Management
 Reforms for the Merger of
Banks
 Roadmap for Foreign Banks
 Banking Codes & Standard
Boards of India
 Extension of Swabhiman
Scheme
 Revival of weak banks
 Reforms made by UPA
Government
 Upgradtion of Technology