The document summarizes the recommendations of the Narasimham Committee on Banking Sector Reforms from 1998. It recommended greater autonomy for public sector banks, reforming the role of the Reserve Bank of India to separate its regulatory and ownership functions, and encouraging bank consolidation to create stronger banks that could better support the Indian economy. It also emphasized reducing non-performing assets, tightening capital adequacy norms, and allowing more entry of foreign banks.
The document discusses the Narasimham Committee reports from 1991 and 1998 that were pivotal in reforming India's financial system. The 1991 report recommended reducing CRR and SLR ratios, phasing out directed credit, interest rate deregulation, bank restructuring, and increasing autonomy. The 1998 report focused on strengthening banks through mergers, raising capital adequacy ratios, reducing NPAs, and reviewing banking laws. The recommendations helped transform India's banking system and supported the country's economic growth.
M Narasinhan committee on banking sector reformsShwetanshu Gupta
The document discusses the M. Narasimhan Committee, which was formed in 1991 and 1998 to study issues in India's banking system and recommend reforms. The 1991 committee recommended reducing high statutory reserve requirements to free up bank resources, restructuring banks, and establishing an asset reconstruction fund. The 1998 committee focused on strengthening banks' capital adequacy, allowing private sector competition, and reforming banking laws and regulations. Both committees' recommendations helped modernize India's banking system.
Narsimham committee report and its impact 2014Akshay Thakur
The document summarizes the key recommendations of the Narasimham Committee reports from 1991 and 1998 on Indian banking sector reforms. The 1991 report recommended reducing CRR and SLR, phasing out directed lending, interest rate deregulation, and restructuring banks. The 1998 report reviewed implementation of 1991 reforms and recommended further strengthening banks through mergers, raising capital adequacy ratios, and increasing bank autonomy. Both reports significantly improved the stability and resilience of India's banking system.
Banking sector reforms in India were introduced in 1991 as part of broader economic liberalization. Key recommendations from the 1991 Narasimham Committee report included reducing statutory reserve requirements and introducing transparency measures. Subsequent reforms focused on strengthening the banking system, including increasing capital requirements. The 1998 Narasimham report proposed further regulatory changes. Major reforms since then include financial inclusion programs, new types of banks like payments banks, and growth of digital banking technologies like UPI and ATMs. However, increased technology usage has also raised cybersecurity risks for the Indian banking sector.
The document defines merchant banking and outlines its key services. Merchant banking originated in Europe to finance foreign trade and was introduced to India in 1967. It primarily provides financial advice and services to large corporations, engaging in activities like corporate counseling, project financing, portfolio management, and mergers and acquisitions. Unlike commercial banks, merchant banks do not provide regular banking services but instead focus on investment banking activities in primary markets. The document lists major public and private sector as well as foreign merchant banking institutions operating in India.
Narsimha committee report on financial reformsPankaj Baid
The Narasimham Committee was formed in 1991 and 1998 to examine aspects of financial system reforms in India. The 1991 committee recommended reducing CRR and SLR, phasing out directed credit, interest rate deregulation, and restructuring banks. The 1998 committee focused on strengthening banks through mergers and raising capital adequacy ratios. Both committees significantly impacted Indian banking sector reforms.
The Narasimham Committee was formed in 1991 and 1998 to reform India's financial system. The 1991 report recommended reducing statutory liquidity and cash reserve ratios, phasing out directed credit programs, deregulating interest rates, restructuring banks, and establishing an asset recovery tribunal. The 1998 report recommended strengthening banks' capital adequacy, narrowing weak banks' scopes, reviewing banking laws, and increasing bank autonomy and privatization. Both reports aimed to modernize and stabilize India's banking system.
The document discusses the Narasimham Committee reports from 1991 and 1998 and their recommendations regarding the banking sector in India. Some of the key recommendations included establishing asset reconstruction companies to take bad debts off banks' balance sheets, increasing banks' capital adequacy ratios, reducing statutory liquidity ratios over time, and granting more autonomy to public sector banks. The document also provides details on two of the early asset reconstruction companies established in India - ARCIL and ACE - including their ownership structures.
The document discusses the Narasimham Committee reports from 1991 and 1998 that were pivotal in reforming India's financial system. The 1991 report recommended reducing CRR and SLR ratios, phasing out directed credit, interest rate deregulation, bank restructuring, and increasing autonomy. The 1998 report focused on strengthening banks through mergers, raising capital adequacy ratios, reducing NPAs, and reviewing banking laws. The recommendations helped transform India's banking system and supported the country's economic growth.
M Narasinhan committee on banking sector reformsShwetanshu Gupta
The document discusses the M. Narasimhan Committee, which was formed in 1991 and 1998 to study issues in India's banking system and recommend reforms. The 1991 committee recommended reducing high statutory reserve requirements to free up bank resources, restructuring banks, and establishing an asset reconstruction fund. The 1998 committee focused on strengthening banks' capital adequacy, allowing private sector competition, and reforming banking laws and regulations. Both committees' recommendations helped modernize India's banking system.
Narsimham committee report and its impact 2014Akshay Thakur
The document summarizes the key recommendations of the Narasimham Committee reports from 1991 and 1998 on Indian banking sector reforms. The 1991 report recommended reducing CRR and SLR, phasing out directed lending, interest rate deregulation, and restructuring banks. The 1998 report reviewed implementation of 1991 reforms and recommended further strengthening banks through mergers, raising capital adequacy ratios, and increasing bank autonomy. Both reports significantly improved the stability and resilience of India's banking system.
Banking sector reforms in India were introduced in 1991 as part of broader economic liberalization. Key recommendations from the 1991 Narasimham Committee report included reducing statutory reserve requirements and introducing transparency measures. Subsequent reforms focused on strengthening the banking system, including increasing capital requirements. The 1998 Narasimham report proposed further regulatory changes. Major reforms since then include financial inclusion programs, new types of banks like payments banks, and growth of digital banking technologies like UPI and ATMs. However, increased technology usage has also raised cybersecurity risks for the Indian banking sector.
The document defines merchant banking and outlines its key services. Merchant banking originated in Europe to finance foreign trade and was introduced to India in 1967. It primarily provides financial advice and services to large corporations, engaging in activities like corporate counseling, project financing, portfolio management, and mergers and acquisitions. Unlike commercial banks, merchant banks do not provide regular banking services but instead focus on investment banking activities in primary markets. The document lists major public and private sector as well as foreign merchant banking institutions operating in India.
Narsimha committee report on financial reformsPankaj Baid
The Narasimham Committee was formed in 1991 and 1998 to examine aspects of financial system reforms in India. The 1991 committee recommended reducing CRR and SLR, phasing out directed credit, interest rate deregulation, and restructuring banks. The 1998 committee focused on strengthening banks through mergers and raising capital adequacy ratios. Both committees significantly impacted Indian banking sector reforms.
The Narasimham Committee was formed in 1991 and 1998 to reform India's financial system. The 1991 report recommended reducing statutory liquidity and cash reserve ratios, phasing out directed credit programs, deregulating interest rates, restructuring banks, and establishing an asset recovery tribunal. The 1998 report recommended strengthening banks' capital adequacy, narrowing weak banks' scopes, reviewing banking laws, and increasing bank autonomy and privatization. Both reports aimed to modernize and stabilize India's banking system.
The document discusses the Narasimham Committee reports from 1991 and 1998 and their recommendations regarding the banking sector in India. Some of the key recommendations included establishing asset reconstruction companies to take bad debts off banks' balance sheets, increasing banks' capital adequacy ratios, reducing statutory liquidity ratios over time, and granting more autonomy to public sector banks. The document also provides details on two of the early asset reconstruction companies established in India - ARCIL and ACE - including their ownership structures.
The document discusses capital adequacy norms for banks. It explains that capital acts as a cushion for banks against losses from risks like credit, market, and liquidity risks. The amount of capital a bank needs depends on the risks it takes and is assessed by regulators. There are two tiers of capital - Tier 1 includes equity and reserves, while Tier 2 includes provisions, revaluation reserves, and subordinated debt. The Basel Committee on Banking Supervision issues guidelines on capital adequacy requirements to help banks manage risks.
Merchant banking provides various financial services including investment banking, portfolio management, underwriting public offerings, and mergers and acquisitions advice. It originated in London when banks helped finance foreign trade and raise funds for developing countries. In India, merchant banking grew with the establishment of banks like Grindlays and Citibank in the 1960s-1970s. Merchant banks operate under regulations set by the Securities and Exchange Board of India that classify banks by the types of services they can provide and require minimum capital levels. They must obtain authorization, follow code of conduct guidelines, and contribute to the market by channelizing capital and ensuring regulatory compliance.
This document discusses asset liability management (ALM) in banks. It begins by defining the components of a bank's balance sheet, including assets like cash, investments, advances, and fixed assets, as well as liabilities like capital, deposits, and borrowings. It then explains a bank's profit and loss account. The document traces the evolution of ALM from a focus on assets to incorporating liability management and interest rate risk. It defines ALM as managing a bank's balance sheet to allow for different interest rate and liquidity scenarios. Finally, it discusses the key risks managed by ALM - liquidity risk, currency risk, and interest rate risk - and some tools used, including maturity ladder analysis, duration, simulation,
Merchant banking provides capital to companies through equity investment rather than loans. It offers advisory services on corporate matters and investment banking services like mergers and acquisitions. Merchant banking started in Italy and France in the 17th-18th centuries and modern merchant banking began in London by financing foreign trade through bill acceptance. In India, merchant banking was introduced by Grindlays Bank in 1967 and other Indian and foreign banks subsequently established merchant banking divisions. Merchant banks invest their own capital and provide services primarily to large corporations and high-net-worth individuals rather than retail banking.
Banking involves accepting deposits from the public and using those funds to issue loans. This provides a safe place for savings and supplies liquidity to fuel economic growth through business and consumer lending. Over time, the Indian banking system has evolved from indigenous banks to direct government intervention through nationalization, liberalization with the entry of private banks, and now includes foreign banks. The major types of banks in India are public sector, private sector, cooperative, rural, and foreign banks that all work to mobilize savings and facilitate transactions.
The Narasimham Committee, established in 1991, submitted two reports that laid the foundation for reforming the Indian banking sector. The committee recommended reducing statutory reserve requirements to improve bank efficiency and productivity. It also recommended phasing out directed lending programs, adopting uniform accounting practices, and increasing capital adequacy requirements. The 1998 Narasimham Committee report further recommended strengthening the banking system, experimenting with narrow banking, increasing capital adequacy ratios, and updating banking laws. The committees' recommendations helped spur the emergence of new private banks and opened up India's capital markets.
Basel III is an international regulatory framework that introduced reforms to improve banking sector regulation and risk management. It consists of 3 pillars - minimum capital requirements, supervisory review, and market discipline. The first pillar sets minimum capital requirements for credit, market and operational risk. It introduced capital buffers and distinguishes between Common Equity Tier 1, Additional Tier 1 and Tier 2 capital. The second pillar aims to ensure banks effectively monitor institution-wide risks. The third pillar promotes market discipline through financial disclosures.
This document discusses asset liability management (ALM) in banks. It defines ALM as a mechanism to address risks from mismatches between bank assets and liabilities due to liquidity or interest rate changes. The ALM framework focuses on profitability and viability. It aims to match asset and liability maturities across time horizons. The objectives of ALM include managing liquidity risk, interest rate risk, and currency risks to stabilize profits and the bank's financial position. Tools used in ALM include information systems, organizational structure, and processes to identify, measure and manage various risks.
Asset liability management (ALM) is the process of managing a bank's assets and liabilities to maximize profits and minimize risk. It involves planning asset and liability maturities and interest rates to ensure adequate liquidity and stable net interest income. The ALM process includes risk identification, measurement, and management of liquidity risk, interest rate risk, currency risk, and other risks. Banks use ALM techniques like maturity gap analysis, duration analysis, simulation, and value at risk to measure different types of risks. The asset liability committee (ALCO) oversees the ALM process and makes strategic decisions about the balance sheet, pricing, and risk management.
Merchant banking provides capital to companies through equity investments rather than loans. It originated in Italy and later spread to other European countries and India. Merchant banks offer services like corporate counseling, project financing, and credit syndication. They operate in both public and private sectors. Qualities of successful merchant bankers include analytical skills, knowledge, relationship building, and innovativeness.
Basel I, II, and III are agreements that established regulatory standards for bank capital adequacy. Basel I, established in 1988, focused on credit risk and set minimum capital requirements of 8% of risk-weighted assets. Basel II, released in 2004, included three pillars: Pillar I established a revised minimum capital framework; Pillar II covered supervisory review; and Pillar III addressed market discipline through disclosure. It recommended a minimum ratio of total capital to risk-weighted assets of 8% and prescribed the minimum capital adequacy ratio of 9% for India. Basel III, finalized in 2017, strengthened bank capital requirements in response to the 2008 financial crisis.
Commercial banks play an important role in the financial sector by accepting deposits from the public and lending money in various forms. They mobilize savings and provide credit to meet the needs of businesses, farmers, consumers and other sectors. As profit-seeking institutions, commercial banks perform primary functions like accepting deposits and lending loans. They also offer secondary services like collection and payment services, income tax consultation, and money transfers. Some banks engage in additional activities such as housing finance, mutual funds, and merchant banking to maximize profits. Overall, commercial banks act as intermediaries between savers and borrowers in the economy.
The document summarizes the history of banking in India from pre-independence to present times. It discusses how the Banking Companies Act of 1949 defined banking and banks. It then outlines the key stages in Indian banking history - pre-independence with the presidency banks, post-independence nationalization of banks in 1969 and 1980, introduction of private banks in 1990s, and ongoing reforms. The document also briefly discusses the role of RBI as the central bank and regulator and the current scenario of public, private, and foreign banks in India.
This document discusses nomination facilities available in bank accounts and lockers in India according to the Banking Regulation Act of 1949. Key points include:
- Nomination allows for faster release of funds to a nominee without requiring a legal certificate. It is available for deposit accounts, lockers, and safe custody.
- A nomination names one individual (not organizations) who can claim the funds/articles. It can be made for new or existing accounts.
- Nomination registration is noted on account documents but the nominee's name is not included without customer request.
- Nomination continues unless cancelled and minors require a guardian's nomination until adulthood. Payments to nominees discharge the bank from further liability
The document discusses the Discount and Finance House of India Limited (DFHI). Some key points:
1. DFHI was established in 1988 by the Reserve Bank of India and public sector banks to develop the money market and provide liquidity to money market instruments.
2. Its objectives include evening out liquidity imbalances, promoting the secondary market for short-term instruments, and providing safe investment avenues.
3. It deals in treasury bills, government securities, certificates of deposit, commercial papers, and call money. DFHI also offers constituent sub-accounts to allow entities access to government securities.
Presentation on Brief introduction to Indian financial markets (Indian Financial System). This presentation broad classification of the financial system into financial institutions, financial markets, financial instruments and financial services.
The document summarizes the key findings and recommendations of the Verma Committee, which was appointed in 1999 to examine problems facing weak public sector banks in India and propose restructuring solutions. The committee identified 8 banks with losses exceeding net worth and 3 banks with negative operating profits for 3 years. It recommended a two-stage restructuring process involving operational and organizational changes first, followed by privatization or merger options. Staff cost reductions, branch rationalization and maintaining adequate capital levels were also suggested.
An investment banking is a financial institution that assists individuals, corporations and governments in raising financial capital by underwriting or acting as the client’s agent in the issuance of securities or both
M naraSIMHAM COMMITEE ON FINANCIAL AND BANKING SECTOR REFORM pdfShwetanshu Gupta
The document discusses the M. Narasimham Committee reports from 1991 and 1998 that helped reform India's banking system. The 1991 report recommended reducing statutory reserves, phasing out directed lending, interest rate deregulation, and more. The 1998 report focused on strengthening banks, capital adequacy ratios, and reviewing banking laws. The reforms helped increase branch networks, deregulate interest rates, reduce directed lending, and establish better regulatory frameworks.
The document discusses India's financial sector reforms since the 1990s. It summarizes the key recommendations of the Narasimham Committees in 1991 and 1998 that helped modernize and strengthen India's banking system. The 1991 report recommended establishing a tiered banking structure, reducing statutory reserves, and deregulating interest rates. The 1998 report focused on increasing capital requirements, promoting bank mergers, and reviewing banking laws and ownership. The government implemented many changes based on these reports, including lowering reserve requirements, introducing prudential norms, allowing new private banks, and establishing mechanisms for debt recovery.
The document discusses capital adequacy norms for banks. It explains that capital acts as a cushion for banks against losses from risks like credit, market, and liquidity risks. The amount of capital a bank needs depends on the risks it takes and is assessed by regulators. There are two tiers of capital - Tier 1 includes equity and reserves, while Tier 2 includes provisions, revaluation reserves, and subordinated debt. The Basel Committee on Banking Supervision issues guidelines on capital adequacy requirements to help banks manage risks.
Merchant banking provides various financial services including investment banking, portfolio management, underwriting public offerings, and mergers and acquisitions advice. It originated in London when banks helped finance foreign trade and raise funds for developing countries. In India, merchant banking grew with the establishment of banks like Grindlays and Citibank in the 1960s-1970s. Merchant banks operate under regulations set by the Securities and Exchange Board of India that classify banks by the types of services they can provide and require minimum capital levels. They must obtain authorization, follow code of conduct guidelines, and contribute to the market by channelizing capital and ensuring regulatory compliance.
This document discusses asset liability management (ALM) in banks. It begins by defining the components of a bank's balance sheet, including assets like cash, investments, advances, and fixed assets, as well as liabilities like capital, deposits, and borrowings. It then explains a bank's profit and loss account. The document traces the evolution of ALM from a focus on assets to incorporating liability management and interest rate risk. It defines ALM as managing a bank's balance sheet to allow for different interest rate and liquidity scenarios. Finally, it discusses the key risks managed by ALM - liquidity risk, currency risk, and interest rate risk - and some tools used, including maturity ladder analysis, duration, simulation,
Merchant banking provides capital to companies through equity investment rather than loans. It offers advisory services on corporate matters and investment banking services like mergers and acquisitions. Merchant banking started in Italy and France in the 17th-18th centuries and modern merchant banking began in London by financing foreign trade through bill acceptance. In India, merchant banking was introduced by Grindlays Bank in 1967 and other Indian and foreign banks subsequently established merchant banking divisions. Merchant banks invest their own capital and provide services primarily to large corporations and high-net-worth individuals rather than retail banking.
Banking involves accepting deposits from the public and using those funds to issue loans. This provides a safe place for savings and supplies liquidity to fuel economic growth through business and consumer lending. Over time, the Indian banking system has evolved from indigenous banks to direct government intervention through nationalization, liberalization with the entry of private banks, and now includes foreign banks. The major types of banks in India are public sector, private sector, cooperative, rural, and foreign banks that all work to mobilize savings and facilitate transactions.
The Narasimham Committee, established in 1991, submitted two reports that laid the foundation for reforming the Indian banking sector. The committee recommended reducing statutory reserve requirements to improve bank efficiency and productivity. It also recommended phasing out directed lending programs, adopting uniform accounting practices, and increasing capital adequacy requirements. The 1998 Narasimham Committee report further recommended strengthening the banking system, experimenting with narrow banking, increasing capital adequacy ratios, and updating banking laws. The committees' recommendations helped spur the emergence of new private banks and opened up India's capital markets.
Basel III is an international regulatory framework that introduced reforms to improve banking sector regulation and risk management. It consists of 3 pillars - minimum capital requirements, supervisory review, and market discipline. The first pillar sets minimum capital requirements for credit, market and operational risk. It introduced capital buffers and distinguishes between Common Equity Tier 1, Additional Tier 1 and Tier 2 capital. The second pillar aims to ensure banks effectively monitor institution-wide risks. The third pillar promotes market discipline through financial disclosures.
This document discusses asset liability management (ALM) in banks. It defines ALM as a mechanism to address risks from mismatches between bank assets and liabilities due to liquidity or interest rate changes. The ALM framework focuses on profitability and viability. It aims to match asset and liability maturities across time horizons. The objectives of ALM include managing liquidity risk, interest rate risk, and currency risks to stabilize profits and the bank's financial position. Tools used in ALM include information systems, organizational structure, and processes to identify, measure and manage various risks.
Asset liability management (ALM) is the process of managing a bank's assets and liabilities to maximize profits and minimize risk. It involves planning asset and liability maturities and interest rates to ensure adequate liquidity and stable net interest income. The ALM process includes risk identification, measurement, and management of liquidity risk, interest rate risk, currency risk, and other risks. Banks use ALM techniques like maturity gap analysis, duration analysis, simulation, and value at risk to measure different types of risks. The asset liability committee (ALCO) oversees the ALM process and makes strategic decisions about the balance sheet, pricing, and risk management.
Merchant banking provides capital to companies through equity investments rather than loans. It originated in Italy and later spread to other European countries and India. Merchant banks offer services like corporate counseling, project financing, and credit syndication. They operate in both public and private sectors. Qualities of successful merchant bankers include analytical skills, knowledge, relationship building, and innovativeness.
Basel I, II, and III are agreements that established regulatory standards for bank capital adequacy. Basel I, established in 1988, focused on credit risk and set minimum capital requirements of 8% of risk-weighted assets. Basel II, released in 2004, included three pillars: Pillar I established a revised minimum capital framework; Pillar II covered supervisory review; and Pillar III addressed market discipline through disclosure. It recommended a minimum ratio of total capital to risk-weighted assets of 8% and prescribed the minimum capital adequacy ratio of 9% for India. Basel III, finalized in 2017, strengthened bank capital requirements in response to the 2008 financial crisis.
Commercial banks play an important role in the financial sector by accepting deposits from the public and lending money in various forms. They mobilize savings and provide credit to meet the needs of businesses, farmers, consumers and other sectors. As profit-seeking institutions, commercial banks perform primary functions like accepting deposits and lending loans. They also offer secondary services like collection and payment services, income tax consultation, and money transfers. Some banks engage in additional activities such as housing finance, mutual funds, and merchant banking to maximize profits. Overall, commercial banks act as intermediaries between savers and borrowers in the economy.
The document summarizes the history of banking in India from pre-independence to present times. It discusses how the Banking Companies Act of 1949 defined banking and banks. It then outlines the key stages in Indian banking history - pre-independence with the presidency banks, post-independence nationalization of banks in 1969 and 1980, introduction of private banks in 1990s, and ongoing reforms. The document also briefly discusses the role of RBI as the central bank and regulator and the current scenario of public, private, and foreign banks in India.
This document discusses nomination facilities available in bank accounts and lockers in India according to the Banking Regulation Act of 1949. Key points include:
- Nomination allows for faster release of funds to a nominee without requiring a legal certificate. It is available for deposit accounts, lockers, and safe custody.
- A nomination names one individual (not organizations) who can claim the funds/articles. It can be made for new or existing accounts.
- Nomination registration is noted on account documents but the nominee's name is not included without customer request.
- Nomination continues unless cancelled and minors require a guardian's nomination until adulthood. Payments to nominees discharge the bank from further liability
The document discusses the Discount and Finance House of India Limited (DFHI). Some key points:
1. DFHI was established in 1988 by the Reserve Bank of India and public sector banks to develop the money market and provide liquidity to money market instruments.
2. Its objectives include evening out liquidity imbalances, promoting the secondary market for short-term instruments, and providing safe investment avenues.
3. It deals in treasury bills, government securities, certificates of deposit, commercial papers, and call money. DFHI also offers constituent sub-accounts to allow entities access to government securities.
Presentation on Brief introduction to Indian financial markets (Indian Financial System). This presentation broad classification of the financial system into financial institutions, financial markets, financial instruments and financial services.
The document summarizes the key findings and recommendations of the Verma Committee, which was appointed in 1999 to examine problems facing weak public sector banks in India and propose restructuring solutions. The committee identified 8 banks with losses exceeding net worth and 3 banks with negative operating profits for 3 years. It recommended a two-stage restructuring process involving operational and organizational changes first, followed by privatization or merger options. Staff cost reductions, branch rationalization and maintaining adequate capital levels were also suggested.
An investment banking is a financial institution that assists individuals, corporations and governments in raising financial capital by underwriting or acting as the client’s agent in the issuance of securities or both
M naraSIMHAM COMMITEE ON FINANCIAL AND BANKING SECTOR REFORM pdfShwetanshu Gupta
The document discusses the M. Narasimham Committee reports from 1991 and 1998 that helped reform India's banking system. The 1991 report recommended reducing statutory reserves, phasing out directed lending, interest rate deregulation, and more. The 1998 report focused on strengthening banks, capital adequacy ratios, and reviewing banking laws. The reforms helped increase branch networks, deregulate interest rates, reduce directed lending, and establish better regulatory frameworks.
The document discusses India's financial sector reforms since the 1990s. It summarizes the key recommendations of the Narasimham Committees in 1991 and 1998 that helped modernize and strengthen India's banking system. The 1991 report recommended establishing a tiered banking structure, reducing statutory reserves, and deregulating interest rates. The 1998 report focused on increasing capital requirements, promoting bank mergers, and reviewing banking laws and ownership. The government implemented many changes based on these reports, including lowering reserve requirements, introducing prudential norms, allowing new private banks, and establishing mechanisms for debt recovery.
The document discusses the recommendations of the Narsimham Committee I and II on financial sector reforms in India. Narsimham Committee I recommended reducing SLR and CRR over time to allow banks to lend more productively. It also recommended redefining priority sectors, deregulating interest rates, reducing number of public sector banks, establishing an asset reconstruction fund, and allowing profitable banks to raise capital from markets. Narsimham Committee II focused on strengthening banks, adopting the narrow banking concept for weak banks, raising capital adequacy norms, reviewing bank ownership models, and updating banking laws.
HDFC Bank Ltd. conducted research on its functional areas and performance. The objectives were to understand functions, evaluate company performance, and measure individual area performance. Data was collected through interviews with managers and executives. The banking sector in India has grown from money lending to modern banking. Recent reforms have improved profits, productivity, and efficiency. Prospects for the banking sector are good due to economic growth, increasing retail loans, and expanded non-interest income sources.
HDFC Bank Ltd. conducted research on its functional areas and performance. The objectives were to understand functions, evaluate industry performance, and measure individual area performance. Primary and secondary data was collected through employee interviews. Department heads and managers were interviewed as a non-probability sample. The history of banking in India dates back to Vedic times, with early indigenous bankers and agency houses. Major developments included the establishment of presidency banks, the Reserve Bank of India, nationalization of banks, and reforms allowing private banks. Banking sector reforms have improved profitability, productivity and efficiency.
This document provides an overview of the impact of banking sector reforms in India. It discusses the necessity for reforms in the 1990s due to economic crisis. It outlines the key recommendations of the 1991 and 1998 Narasimhan Committees, which served as the basis for reforms. The reforms focused on reducing reserve requirements, introducing prudential norms, capital adequacy norms, interest rate deregulation, and allowing private sector banks. The impacts of the reforms included improved productivity, profitability and asset quality of banks as well as enhanced customer services and corporate lending. Overall, the reforms helped make the Indian banking sector more robust and competitive.
The document provides an overview of the history and development of banking in India. It discusses the following key points:
1. Banking in India can be broadly classified into commercial banks, cooperative banks, regional rural banks, and foreign banks. The Reserve Bank of India acts as the central bank.
2. The Indian banking system has undergone significant reforms since the early 1990s to increase efficiency and competition. This included reducing reserve requirements, deregulating interest rates, and allowing more private sector and foreign banks.
3. Reforms have helped improve banks' profitability and diversification of services. However, more reforms are still needed to strengthen the system and ensure banks can meet the challenges of globalization.
ECONOMIC AND FINANCIAL ANALYSIS OF SBI AND BOB Jeetu Matta
This document provides an analysis of State Bank of India (SBI) and Bank of Baroda (BOB). It begins with an executive summary that outlines the objectives of the analysis, which are to examine different government norms, functions, risks, and strategies related to commercial banking in India. It also aims to analyze how economic issues affect the Indian banking sector. The document then provides detailed information on the introduction and functions of banks in India, types of bank accounts, an introduction to SBI and BOB, comparative analysis of banks and non-banking financial institutions, impact of mergers on cost efficiency, government policies related to SBI and BOB, risk management, effects of inflation on commercial banks, data analysis through financial ratios
an analysis about the Indian banking system and the analysis of two major banking sector reforms; Narasimham committee (1 and 2) on banking sector reforms
Banking sector reforms in india and their impact on the economyRishi Kumar
This document is a dissertation report submitted by Mr. Rishi Kumar to Savitribai Phule Pune University in partial fulfillment of an MBA degree. It examines the banking sector reforms in India and their impact on the economy. The report provides background on the nationalization of banks in India and outlines the key recommendations of the Narasimham Committee reports from 1991 and 1998, which laid the foundation for modernizing and reforming the Indian banking system. It discusses reforms such as reducing statutory reserves, introducing prudential lending norms, and increasing private sector participation and competition in banking.
The document discusses the history and reforms of the banking industry in India. It describes the industry's evolution through five phases: evolutionary, foundation, expansion, consolidation, and reformatory. Major reforms since the 1990s included liberalizing interest rates, reducing statutory preemptions like CRR and SLR, increasing competition through private banks and foreign banks, and improving regulation and supervision. The reforms have led to improved access to credit, more independent monetary policymaking, and greater operational freedom for banks.
The document discusses the recommendations of the Narasimhan Committee on financial sector reforms in India in the 1990s. It summarizes the key reforms such as liberalizing private sector participation in banking, strengthening bank regulation, developing the bond and money markets, reforming insurance and capital markets, and establishing independent regulators like SEBI and IRDA. The reforms aimed to develop an efficient, competitive and stable financial system to effectively allocate resources and support growth.
This document provides a summary of the SARFAESI Act of 2002 and the evolution of debt recovery systems in the Indian banking sector. It discusses how non-performing assets piled up in the sector due to inadequate debt recovery mechanisms and long civil court processes. This led to various committees and reforms over time to improve recovery of debts, including the establishment of Debt Recovery Tribunals, introduction of prudential norms, and reductions in statutory reserve requirements. A key reform was the enactment of the SARFAESI Act in 2002, which allowed banks and financial institutions to enforce security interests without court intervention.
The document reviews money market reforms in India and evaluates their current status. It discusses the history of money market reforms since 1991, including reductions to reserve requirements and interest rates as well as the introduction of new instruments. However, it argues that further reforms are still needed to develop debt markets fully and introduce innovative products that better serve small entrepreneurs, farmers, and the poor. Rural access to banking also remains inadequate despite reforms.
The document reviews money market reforms in India and evaluates their adequacy. It discusses the history of money market reforms since 1991, including reductions to statutory reserve requirements, increased banking freedom and private sector participation, and new money market instruments. However, the author argues that further liberalization and innovations are still needed, particularly to better serve small entrepreneurs, artisans, farmers and poor people.
Financial sector reforms in Nepal began in the mid-1980s and have been implemented in four phases. The initial reforms opened the banking sector to foreign investment and deregulated interest rates. Subsequent phases saw the establishment of private banks and non-bank financial institutions. Recent reforms aim to improve regulation and supervision, adopt international accounting standards, and strengthen the Nepal Rastra Bank's autonomy and capacity. However, fully reforming state-owned banks and improving governance, risk management and staff skills remains an ongoing challenge. International support and coordination between government and donors is needed to ensure the success and sustainability of financial sector reforms in Nepal.
The document provides an overview of banking sector reforms in India. It discusses key recommendations of the Narasimham Committee reports which laid the foundation for banking sector reforms in India, including reducing statutory liquidity ratio and cash reserve ratio, introducing minimum capital adequacy ratios, and adopting uniform accounting practices. The reforms aimed to make the Indian banking system more efficient, competitive, and in line with global standards. It also discusses some challenges in implementing the reforms such as the need to reduce non-performing assets and strengthen weak banks.
Fundamental Analysis involves examining the economic, financial and other qualitative and quantitative factors related to a security in order to determine its intrinsic value. If a company's stock is trading above the intrinsic value or fair value, then the stock is overvalued. If a company's stock is trading below the intrinsic value, then the stock is undervalued. It attempts to study everything that can affect the security's value, including macroeconomic factors (like the overall economy and industry conditions) and individually specific factors (like the financial condition and management of companies).
Fundamental analysis, which is also known as quantitative analysis, involves delving into a company’s financial statements (such as profit and loss account and balance sheet) in order to study various financial indicators (such as revenues, earnings, liabilities, expenses and assets.
The main purpose of the report is to understand and interpret the factors affecting the banking sector in India.
This document provides a project report on fundamental analysis of the banking sector in India submitted by Leslie Sequeira to Don Bosco Institute of Management and Research. The report includes an introduction to the history of banking in India from 1786 to the present, which is divided into three phases. It also outlines the research methodology, includes an index of contents, and covers data collection, analysis and interpretation of the banking sector. The main purpose is to understand and interpret factors affecting the banking sector in India through fundamental analysis.
This document is a project report on trend analysis of HDFC Ltd submitted for a Master's degree. It includes an introduction discussing trend analysis and its uses in business for revenue/cost analysis and investment analysis. It then provides context on the banking industry in India, from its origins in the 18th century to the modern system established and regulated by the Reserve Bank of India. The project report will analyze trends in HDFC to fulfill degree requirements.
Similar to Narasimham committee on banking sector reforms wikipedia (20)
Dr. Alyce Su Cover Story - China's Investment Leadermsthrill
In World Expo 2010 Shanghai – the most visited Expo in the World History
https://www.britannica.com/event/Expo-Shanghai-2010
China’s official organizer of the Expo, CCPIT (China Council for the Promotion of International Trade https://en.ccpit.org/) has chosen Dr. Alyce Su as the Cover Person with Cover Story, in the Expo’s official magazine distributed throughout the Expo, showcasing China’s New Generation of Leaders to the World.
How to Identify the Best Crypto to Buy Now in 2024.pdfKezex (KZX)
To identify the best crypto to buy in 2024, analyze market trends, assess the project's fundamentals, review the development team and community, monitor adoption rates, and evaluate risk tolerance. Stay updated with news, regulatory changes, and expert opinions to make informed decisions.
What Lessons Can New Investors Learn from Newman Leech’s Success?Newman Leech
Newman Leech's success in the real estate industry is based on key lessons and principles, offering practical advice for new investors and serving as a blueprint for building a successful career.
Fabular Frames and the Four Ratio ProblemMajid Iqbal
Digital, interactive art showing the struggle of a society in providing for its present population while also saving planetary resources for future generations. Spread across several frames, the art is actually the rendering of real and speculative data. The stereographic projections change shape in response to prompts and provocations. Visitors interact with the model through speculative statements about how to increase savings across communities, regions, ecosystems and environments. Their fabulations combined with random noise, i.e. factors beyond control, have a dramatic effect on the societal transition. Things get better. Things get worse. The aim is to give visitors a new grasp and feel of the ongoing struggles in democracies around the world.
Stunning art in the small multiples format brings out the spatiotemporal nature of societal transitions, against backdrop issues such as energy, housing, waste, farmland and forest. In each frame we see hopeful and frightful interplays between spending and saving. Problems emerge when one of the two parts of the existential anaglyph rapidly shrinks like Arctic ice, as factors cross thresholds. Ecological wealth and intergenerational equity areFour at stake. Not enough spending could mean economic stress, social unrest and political conflict. Not enough saving and there will be climate breakdown and ‘bankruptcy’. So where does speculative design start and the gambling and betting end? Behind each fabular frame is a four ratio problem. Each ratio reflects the level of sacrifice and self-restraint a society is willing to accept, against promises of prosperity and freedom. Some values seem to stabilise a frame while others cause collapse. Get the ratios right and we can have it all. Get them wrong and things get more desperate.
The Rise and Fall of Ponzi Schemes in America.pptxDiana Rose
Ponzi schemes, a notorious form of financial fraud, have plagued America’s investment landscape for decades. Named after Charles Ponzi, who orchestrated one of the most infamous schemes in the early 20th century, these fraudulent operations promise high returns with little or no risk, only to collapse and leave investors with significant losses. This article explores the nature of Ponzi schemes, notable cases in American history, their impact on victims, and measures to prevent falling prey to such scams.
Understanding Ponzi Schemes
A Ponzi scheme is an investment scam where returns are paid to earlier investors using the capital from newer investors, rather than from legitimate profit earned. The scheme relies on a constant influx of new investments to continue paying the promised returns. Eventually, when the flow of new money slows down or stops, the scheme collapses, leaving the majority of investors with substantial financial losses.
Historical Context: Charles Ponzi and His Legacy
Charles Ponzi is the namesake of this deceptive practice. In the 1920s, Ponzi promised investors in Boston a 50% return within 45 days or 100% return in 90 days through arbitrage of international reply coupons. Initially, he paid returns as promised, not from profits, but from the investments of new participants. When his scheme unraveled, it resulted in losses exceeding $20 million (equivalent to about $270 million today).
Notable American Ponzi Schemes
1. Bernie Madoff: Perhaps the most notorious Ponzi scheme in recent history, Bernie Madoff’s fraud involved $65 billion. Madoff, a well-respected figure in the financial industry, promised steady, high returns through a secretive investment strategy. His scheme lasted for decades before collapsing in 2008, devastating thousands of investors, including individuals, charities, and institutional clients.
2. Allen Stanford: Through his company, Stanford Financial Group, Allen Stanford orchestrated a $7 billion Ponzi scheme, luring investors with fraudulent certificates of deposit issued by his offshore bank. Stanford promised high returns and lavish lifestyle benefits to his investors, which ultimately led to a 110-year prison sentence for the financier in 2012.
3. Tom Petters: In a scheme that lasted more than a decade, Tom Petters ran a $3.65 billion Ponzi scheme, using his company, Petters Group Worldwide. He claimed to buy and sell consumer electronics, but in reality, he used new investments to pay off old debts and fund his extravagant lifestyle. Petters was convicted in 2009 and sentenced to 50 years in prison.
4. Eric Dalius and Saivian: Eric Dalius, a prominent figure behind Saivian, a cashback program promising high returns, is under scrutiny for allegedly orchestrating a Ponzi scheme. Saivian enticed investors with promises of up to 20% cash back on everyday purchases. However, investigations suggest that the returns were paid using new investments rather than legitimate profits. The collapse of Saivian l
Discovering Delhi - India's Cultural Capital.pptxcosmo-soil
Delhi, the heartbeat of India, offers a rich blend of history, culture, and modernity. From iconic landmarks like the Red Fort to bustling commercial hubs and vibrant culinary scenes, Delhi's real estate landscape is dynamic and diverse. Discover the essence of India's capital, where tradition meets innovation.
Madhya Pradesh, the "Heart of India," boasts a rich tapestry of culture and heritage, from ancient dynasties to modern developments. Explore its land records, historical landmarks, and vibrant traditions. From agricultural expanses to urban growth, Madhya Pradesh offers a unique blend of the ancient and modern.
“Amidst Tempered Optimism” Main economic trends in May 2024 based on the results of the New Monthly Enterprises Survey, #NRES
On 12 June 2024 the Institute for Economic Research and Policy Consulting (IER) held an online event “Economic Trends from a Business Perspective (May 2024)”.
During the event, the results of the 25-th monthly survey of business executives “Ukrainian Business during the war”, which was conducted in May 2024, were presented.
The field stage of the 25-th wave lasted from May 20 to May 31, 2024. In May, 532 companies were surveyed.
The enterprise managers compared the work results in May 2024 with April, assessed the indicators at the time of the survey (May 2024), and gave forecasts for the next two, three, or six months, depending on the question. In certain issues (where indicated), the work results were compared with the pre-war period (before February 24, 2022).
✅ More survey results in the presentation.
✅ Video presentation: https://youtu.be/4ZvsSKd1MzE
Economic Risk Factor Update: June 2024 [SlideShare]Commonwealth
May’s reports showed signs of continued economic growth, said Sam Millette, director, fixed income, in his latest Economic Risk Factor Update.
For more market updates, subscribe to The Independent Market Observer at https://blog.commonwealth.com/independent-market-observer.
Narasimham committee on banking sector reforms wikipedia
1. Narasimham Committee on Banking
Sector Reforms
From the 1991 India economic crisis to its status of third largest economy in the world by 2011, India has
grown significantly in terms of economic development. So has its banking sector. During this period,
recognising the evolving needs of the sector, the Finance Ministry of Government of India (GOI) set up
various committees with the task of analysing India's banking sector and recommending legislation and
regulations to make it more effective, competitive and efficient.[1] Two such expert Committees were set up
under the chairmanship of M. Narasimham. They submitted their recommendations in the 1990s in
reports widely known as the Narasimham Committee-I (1991) report and the Narasimham Committee-
II (1998) Report. These recommendations not only helped unleash the potential of banking in India, they
are also recognised as a factor towards minimising the impact of global financial crisis starting in 2007.
Unlike the socialist-democratic era of the 1960s to 1980s, India is no longer insulated from the global
economy and yet its banks survived the 2008 financial crisis relatively unscathed, a feat due in part to
these Narasimham Committees.[2]
Background
Recommendations of the Committee
Autonomy in Banking
Reform in the role of RBI
Stronger banking system
Non-performing assets
Capital adequacy and tightening of provisioning norms
Entry of foreign banks
Implementation of recommendations
Criticism
Reception
References
During the decades of the 60s and the 70s, India nationalised most of its banks. This culminated with the
balance of payments crisis of the Indian economy where India had to airlift gold to International Monetary
Fund (IMF) to loan money to meet its financial obligations. This event called into question the previous
banking policies of India and triggered the era of economic liberalisation in India in 1991. Given that
rigidities and weaknesses had made serious inroads into the Indian banking system by the late 1980s, the
Government of India (GOI), post-crisis, took several steps to remodel the country's financial system.
(Some claim that these reforms were influenced by the IMF and the World Bank as part of their loan
Contents
Background
2. conditionality to India in 1991).[3] The banking sector, handling 80% of the flow of money in the economy,
needed serious reforms to make it internationally reputable, accelerate the pace of reforms and develop it
into a constructive usher of an efficient, vibrant and competitive economy by adequately supporting the
country's financial needs.[4] In the light of these requirements, two expert Committees were set up in
1990s under the chairmanship of M. Narasimham (an ex-RBI (Reserve Bank of India) governor) which are
widely credited for spearheading the financial sector reform in India.[3] The first Narasimhan Committee
(Committee on the Financial System – CFS) was appointed by Manmohan Singh as India's Finance
Minister on 14 August 1991,[1][5] and the second one (Committee on Banking Sector Reforms)[6] was
appointed by P.Chidambaram[7] as Finance Minister in December 1997.[8] Subsequently, the first one
widely came to be known as the Narasimham Committee-I (1991) and the second one as Narasimham-II
Committee(1998).[9][10] This article is about the recommendations of the Second Narasimham Committee,
the Committee on Banking Sector Reforms.
The purpose of the Narasimham-I Committee was to study all aspects relating to the structure,
organisation, functions and procedures of the financial systems and to recommend improvements in their
efficiency and productivity. The Committee submitted its report to the Finance Minister in November 1991
which was tabled in Parliament on 17 December 1991.[6]
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.[4] It focussed
on issues like size of banks and capital adequacy ratio among other things.[9] M. Narasimham, Chairman,
submitted the report of the Committee on Banking Sector Reforms (Committee-II) to the Finance Minister
Yashwant Sinha in April 1998.[4][9]
The 1998 report of the Committee to the GOI made the following major recommendations:
Greater autonomy was proposed for the public sector banks in order for them to function with equivalent
professionalism as their international counterparts. For this the panel recommended that recruitment
procedures, training and remuneration policies of public sector banks be brought in line with the best-
market-practices of professional banking systemname="Hindu3">"Going ahead with bank mergers" (htt
p://www.thehindubusinessline.in/2010/01/29/stories/2010012951380800.htm).
Thehindubusinessline.in. 29 January 2010. Retrieved 19 February 2011. </ref>[11] It also recommended
the RBI relinquish its seats on the board of directors of these banks. The committee further added that
given that the government nominees to the board of banks are often members of parliament, politicians,
bureaucrats, etc., they often interfere in the day-to-day operations of the bank in the form of the behest-
lending.[4] As such the committee recommended a review of functions of banks boards with a view to make
them responsible for enhancing shareholder value through formulation of corporate strategy and reduction
of the government equity.
Recommendations of the Committee
Autonomy in Banking
3. To implement this, criteria for autonomous status was identified by March 1999 (among other
implementation measures) and 17 banks were considered eligible for autonomy.[12] But some
recommendations like reduction in Government's equity to 33%,[11][13] the issue of greater professionalism
and independence of the board of directors of public sector banks is still awaiting Government follow-
through and implementation.[14]
First, the committee recommended that the RBI withdraw from the 91-day treasury bills market and that
interbank call money and term money markets be restricted to banks and primary dealers.[6][12] Second,
the Committee proposed a segregation of the roles of RBI as a regulator of banks and owner of bank.[15] It
observed that "The Reserve Bank as a regulator of the monetary system should not be the owner of a
bank in view of a possible conflict of interest". As such, it highlighted that RBI's role of effective
supervision was not adequate and wanted it to divest its holdings in banks and financial institutions.
Pursuant to the recommendations, the RBI introduced a Liquidity Adjustment Facility (LAF) operated
through repo and reverse repos to set a corridor for money market interest rates. To begin with, in April
1999, an Interim Liquidity Adjustment Facility (ILAF) was introduced pending further upgradation in
technology and legal/procedural changes to facilitate electronic transfer.[16] As for the second
recommendation, the RBI decided to transfer its respective shareholdings of public banks like State Bank
of India (SBI), National Housing Bank (NHB) and National Bank for Agriculture and Rural Development
(NABARD) to GOI. Subsequently, in 2007–08, GOI decided to acquire entire stake of RBI in SBI, NHB
and NABARD. Of these, the terms of sale for SBI were finalised in 2007–08 itself.[17]
The Committee recommended for merger of large Indian banks to make them strong enough for
supporting international trade.It recommended a three tier banking structure in India through
establishment of three large banks with international presence, eight to ten national banks and a large
number of regional and local banks.[4][9] This proposal had been severely criticized by the RBI employees
union.[18] The Committee recommended the use of mergers to build the size and strength of operations for
each bank.[19] However, it cautioned that large banks should merge only with banks of equivalent size and
not with weaker banks, which should be closed down if unable to revitalise themselves.[6] Given the large
percentage of non-performing assets for weaker banks, some as high as 20% of their total assets, the
concept of "narrow banking" was proposed to assist in their rehabilitation.
There were a string of mergers in banks of India during the late 90s and early 2000s, encouraged strongly
by the Government of India|GOI in line with the Committee's recommendations.[20] However, the
recommended degree of consolidation is still awaiting sufficient government impetus.[14]
Non-performing assets had been the single largest cause of irritation of the banking sector of India.[4]
Earlier the Narasimham Committee-I had broadly concluded that the main reason for the reduced
profitability of the commercial banks in India was the priority sector lending. The committee had
highlighted that 'priority sector lending' was leading to the buildup of non-performing assets of the banks
Reform in the role of RBI
Stronger banking system
Non-performing assets
4. and thus it recommended it to be phased out.[10] Subsequently, the Narasimham Committee-II also
highlighted the need for 'zero' non-performing assets for all Indian banks with International presence.[10]
The 1998 report further blamed poor credit decisions, behest-lending and cyclical economic factors among
other reasons for the buildup of the non-performing assets of these banks to uncomfortably high levels.
The Committee recommended creation of Asset Reconstruction Funds or Asset Reconstruction Companies
to take over the bad debts of banks, allowing them to start on a clean-slate.[4][21][22] The option of
recapitalisation through budgetary provisions was ruled out. Overall the committee wanted a proper
system to identify and classify NPAs,[6] NPAs to be brought down to 3% by 2002[4] and for an independent
loan review meachnism for improved management of loan portfolios.[6] The committee's
recommendations let to introduction of a new legislation which was subsequently implemented as the
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and
came into force with effect from 21 June 2002.[23][24][25]
To improve the inherent strength of the Indian banking system the committee recommended that the
Government should raise the prescribed capital adequacy norms.[9] This would also improve their risk
taking ability. The committee targeted raising the capital adequacy ratio to 9% by 2000 and 10% by 2002
and have penal provisions for banks that fail to meet these requirements.[4][6] For asset classification, the
Committee recommended a mandatory 1% in case of standard assets and for the accrual of interest income
to be done every 90 days instead of 180 days.[12]
Capital adequacy and tightening of provisioning norms
5. To implement these recommendations, the RBI in Oct 1998, initiated the second phase of financial sector
reforms by raising the banks' capital adequacy ratio by 1% and tightening the prudential norms for
provisioning and asset classification in a phased manner on the lines of the Narasimham Committee-II
report.[26] The RBI targeted to bring the capital adequacy ratio to 9% by March 2001.[27] The mid-term
Review of the Monetary and Credit Policy of RBI announced another series of reforms, in line with the
recommendations with the Committee, in October 1999.[12]
The committee suggested that the foreign banks seeking to set up business in India should have a
minimum start-up capital of $25 million as against the existing requirement of $10 million. It said that
foreign banks can be allowed to set up subsidiaries and joint ventures that should be treated on a par with
private banks.[4]
In 1998, RBI Governor Bimal Jalan informed the banks that the RBI had a three to four-year perspective
on the implementation of the Committee's recommendations.[26] Based on the other recommendations of
the committee, the concept of a universal bank was discussed by the RBI and finally ICICI bank became
the first universal bank of India.[16][28][29] The RBI published an "Actions Taken on the
Recommendations" report on 31 October 2001 on its own website. Most of the recommendations of the
Committee have been acted upon (as discussed above) although some major recommendations are still
awaiting action from the Government of India.[30]
There were protests by employee unions of banks in India against the report. The Union of RBI employees
made a strong protest against the Narasimham II Report.[18] There were other plans by the United Forum
of Bank Unions (UFBU), representing about 1.3 million bank employees in India, to meet in Delhi and to
work out a plan of action in the wake of the Narasimham Committee report on banking reforms. The
committee was also criticised in some quarters as "anti-poor". According to some, the committees failed to
recommend measures for faster alleviation of poverty in India by generating new employment.[3] This
caused some suffering to small borrowers (both individuals and businesses in tiny, micro and small
sectors).
Initially, the recommendations were well received in all quarters, including the Planning Commission of
India leading to successful implementation of most of its recommendations.[31] Then it turned out that
during the 2008 economic crisis of major economies worldwide, performance of Indian banking sector was
far better than their international counterparts. This was also credited to the successful implementation of
the recommendations of the Narasimham Committee-II with particular reference to the capital adequacy
norms and the recapitalisation of the public sector banks.[2] The impact of the two committees has been so
significant that elite politicians and financial sectors professionals have been discussing these reports for
more than a decade since their first submission applauding their positive contribution
Entry of foreign banks
Implementation of recommendations
Criticism
Reception
6. 1 . "Prime Minister' s address at RBI Platinum J ubilee Celebrations" ( http: / / pib. nic. in/ new site/ erelease. asp
x ? relid= 6 0 0 2 7 ) . Press Information Bureau, Government of India. 1 April 2 0 1 0 . Retrieved 2 2 February
2 0 1 1 .
2 . "Kudos in order, as also more w ork", Oct1 3 , 2 0 0 8 " ( http: / / w w w . thehindubusinessline. in/ 2 0 0 8 / 1 0 / 1 3 / stori
es/ 2 0 0 8 1 0 1 3 5 0 9 0 0 9 0 0 . htm) . Thehindubusinessline. in. 1 3 October 2 0 0 8 . Retrieved 1 9 February 2 0 1 1 .
3 . "Financial reforms and development" ( http: / / w w w . thehindubusinessline. in/ 2 0 0 2 / 0 4 / 2 6 / stories/ 2 0 0 2 0 4 2
6 0 0 0 6 0 8 0 0 . htm) . S.D.Naik, Business Line, the Hindu. 2 6 April 2 0 0 2 . Retrieved 2 2 February 2 0 1 1 .
4 . "BANKING REFORMS,
Radical prescriptions" ( http: / / w w w . hinduonnet. com/ fline/ fl1 5 1 0 / 1 5 1 0 1 0 9 0 . htm) . SUDHA
MAHALINGAM, Frontline Vol. 15 :: No. 10. 9 – 2 2 May 1 9 9 8 . Retrieved 2 1 February 2 0 1 1 .
5 . India. Committee on the Financial System; M. Narasimham ( 1 9 9 2 ) . Narasimham Committee report on
the financial system, 1991 ( https: / / books. google. com/ books? id= h5 qaAAAAIAAJ ) . Standard Book Co.
Retrieved 2 3 February 2 0 1 1 .
6 . TR J ain; OP Khanna. Macroeconomics ( https: / / books. google. com/ books? id= aGypj Q8 z MYsC& pg= PA3
4 5 ) . FK Publications. pp. 3 4 5 – . ISBN 9 7 8 -8 1 -8 7 1 4 0 -6 5 -8 . Retrieved 2 3 February 2 0 1 1 .
7 . "Financial sector reforms – an assessment" ( http: / / w w w . ex pressindia. com/ fe/ daily/ 1 9 9 7 1 2 3 0 / 3 6 4 5 5 2 6
3 . html) . Sudha Sharma, Expressindia.com. 3 0 December 1 9 9 7 . Retrieved 2 3 February 2 0 1 1 .
8 . "Make the Buck Stop" ( http: / / w w w . india-today. com/ itoday/ 2 0 0 0 1 2 1 1 / chid. shtml) . India Today, on the
net. 1 1 December 2 0 0 0 . Retrieved 2 1 February 2 0 1 1 .
9 . "Narasimham Committee Report 1 9 9 1 1 9 9 8 – Recommendations" ( http: / / kalyan-city. blogspot. com/ 2 0 1
0 / 0 9 / narasimham-committee-report-1 9 9 1 -1 9 9 8 . html) . Gaurav Akrani. 1 6 September 2 0 1 0 . Retrieved
1 9 February 2 0 1 1 .
1 0 . "Vidyanidhi Document" ( https: / / w eb. archive. org/ w eb/ 2 0 1 1 0 7 2 1 1 8 0 8 3 9 / http: / / dspace. vidyanidhi. org. in: 8
0 8 0 / dspace/ bitstream/ 2 0 0 9 / 3 0 4 5 / 9 / U OM-2 0 0 1 -1 7 5 7 -8 . pdf) ( PDF) . Archived from the original ( http: / / ds
pace. vidyanidhi. org. in: 8 0 8 0 / dspace/ bitstream/ 2 0 0 9 / 3 0 4 5 / 9 / U OM-2 0 0 1 -1 7 5 7 -8 . pdf) ( PDF) on 2 1 J uly
2 0 1 1 . Retrieved 1 9 February 2 0 1 1 .
1 1 . "Now Govt has to top up funds banks need to grow " ( http: / / w w w . thehindubusinessline. in/ 2 0 0 4 / 0 5 / 2 1 / st
ories/ 2 0 0 4 0 5 2 1 0 1 9 8 0 8 0 0 . htm) . Thehindubusinessline. in. 2 1 May 2 0 0 4 . Retrieved 1 9 February 2 0 1 1 .
1 2 . anurag. "Banking Sector Reforms 1 9 9 9 – 2 0 0 0 " ( http: / / w w w . banknetindia. com/ banking/ rbip3 a. htm) .
Banknetindia. com. Retrieved 1 9 February 2 0 1 1 .
1 3 . "Business houses can set up banks" ( http: / / economictimes. indiatimes. com/ new s/ new s-by-industry/ ban
king/ finance/ banking/ business-houses-can-set-up-banks/ articleshow / 1 9 4 8 9 9 7 . cms) . The Economic
Times. 2 September 2 0 0 6 . Retrieved 2 1 February 2 0 1 1 .
1 4 . "Budget and banking reforms" ( http: / / w w w . thehindubusinessline. in/ 2 0 1 0 / 0 3 / 0 5 / stories/ 2 0 1 0 0 3 0 5 5 0 7 3 0
8 0 0 . htm) . K. KANAGASABAPATHY, BusinessLine, Business Daily from THE HINDU group of
publications. 5 March 2 0 1 0 . Retrieved 2 3 February 2 0 1 1 .
1 5 . "Nip state-run banks stake below 5 1 % , Centre told" ( http: / / w w w . ex pressindia. com/ fe/ daily/ 1 9 9 8 0 8 1 8 / 2
3 0 5 5 3 4 4 . html) . Ex pressindia. com. 1 8 August 1 9 9 8 . Retrieved 1 9 February 2 0 1 1 .
1 6 . "Tex t of the monetary and credit policy 2 0 0 0 – 0 1 " ( http: / / w w w . ex pressindia. com/ fe/ daily/ 2 0 0 0 0 4 2 8 / fec2
8 0 8 3 . html) . Ex pressindia. com. Retrieved 1 9 February 2 0 1 1 .
1 7 . "Government acquires entire RBI shareholding in SBI" ( http: / / pib. nic. in/ new site/ erelease. aspx ? relid= 2
8 8 9 7 ) . Press Information Bureau, Government of India. 2 9 J une 2 0 0 7 . Retrieved 2 3 February 2 0 1 1 .
1 8 . "RBI U nion' s protest article" ( http: / / w w w . indianex press. com/ fe/ daily/ 1 9 9 8 0 4 2 5 / 1 1 5 5 5 3 1 4 . html) .
Indianex press. com. 2 5 April 1 9 9 8 . Retrieved 1 9 February 2 0 1 1 .
1 9 . "Going ahead w ith bank mergers" ( http: / / w w w . thehindubusinessline. in/ 2 0 1 0 / 0 1 / 2 9 / stories/ 2 0 1 0 0 1 2 9 5 1
3 8 0 8 0 0 . htm) . Thehindubusinessline. in. 2 9 J anuary 2 0 1 0 . Retrieved 1 9 February 2 0 1 1 .
References
7. 2 0 . "Govt favors consolidation in banks" ( http: / / w w w . thehindubusinessline. in/ 2 0 0 4 / 0 8 / 2 9 / stories/ 2 0 0 4 0 8 2 9
0 1 6 1 0 1 0 0 . htm) . Thehindubusinessline. in. 2 9 August 2 0 0 4 . Retrieved 1 9 February 2 0 1 1 .
2 1 . "Asset reconstruction firm mooted to issue sw ap bonds for bad loans" ( http: / / ex pressindia. indianex pre
ss. com/ fe/ daily/ 1 9 9 8 0 5 0 6 / 1 2 6 5 5 2 8 4 . html) . Banking Bureau,Expressindia.com. 6 May 1 9 9 8 . Retrieved
2 3 February 2 0 1 1 .
2 2 . "Panel moots ARC to tackle mounting NPA" ( http: / / w w w . indianex press. com/ res/ w eb/ pIe/ ie/ daily/ 1 9 9 8 0
5 0 6 / 1 2 6 5 0 0 3 4 . html) . ENS ECONOMIC BUREAU, Expressindia.com. 6 May 1 9 9 8 . Retrieved
2 3 February 2 0 1 1 .
2 3 . "NEW LEGISLATION FOR RECOVERY OF DEBTS" ( http: / / pib. nic. in/ archieve/ lreleng/ lyr2 0 0 2 / rmay2 0
0 2 / 2 0 0 5 2 0 0 2 / r2 0 0 5 2 0 0 2 1 . html) . Press Information Bureau, Government of India. 2 0 May 2 0 0 2 .
Retrieved 2 3 February 2 0 1 1 .
2 4 . "Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2 0 0 2 "
( http: / / w w w . icai. org/ resource_ file/ 1 1 4 3 2 p6 8 7 -6 9 4 . pdf) ( PDF) . Retrieved 2 2 February 2 0 1 1 .
2 5 . "Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2 0 0 2 "
( http: / / w w w . drat. tn. nic. in/ Docu/ Securitisation-Act. pdf) ( PDF) . Retrieved 2 2 February 2 0 1 1 .
2 6 . "RBI policy sets deadline for banking reforms" ( http: / / w w w . indianex press. com/ res/ w eb/ pIe/ ie/ daily/ 1 9 9
8 1 0 3 1 / 3 0 4 5 0 0 4 4 . html) . Indian Ex press Article. Retrieved 1 9 February 2 0 1 1 .
2 7 . "Reforms have been taken up in right earnest: Narasimhan" ( http: / / w w w . ex pressindia. com/ fe/ daily/ 1 9 9
8 1 0 3 1 / 3 0 4 5 5 7 1 4 . html) . Ex pressindia. com. 3 1 October 1 9 9 8 . Retrieved 1 9 February 2 0 1 1 .
2 8 . ICICI Bank. "History of ICICI Bank" ( http: / / w w w . icicibank. com/ aboutus/ history. html) . Icicibank. com.
Retrieved 1 9 February 2 0 1 1 .
2 9 . "First Indian U niversal Bank" ( http: / / w w w . banknetindia. com/ banking/ univ. htm) . the banknetindia team.
Retrieved 2 1 February 2 0 1 1 .
3 0 . "RBI Action Taken Report" ( http: / / w w w . rbi. org. in/ scripts/ PublicationReportDetails. aspx ? U rlPage= & ID=
2 5 1 ) . Rbi. org. in. Retrieved 1 9 February 2 0 1 1 .
3 1 . "INDIA' S ECONOMIC REFORMS: AN APPRAISAL" ( http: / / planningcommission. nic. in/ reports/ articles/
msalu/ index . php? repts= ier. htm) . Montek Singh Ahluwalia. 2 6 August 1 9 9 9 . Retrieved 2 3 February
2 0 1 1 .
Retrieved from "https: / / en. w ikipedia. org/ w / index . php?
title= Narasimham_ Committee_ on_ Banking_ Sector_ Reforms& oldid= 8 8 2 3 8 7 1 2 2 "
This page was last edited on 8 February 2019, at 18:45 (UTC).
Tex t is available under the Creative Commons Attribution-ShareAlike License; additional terms may apply.
By using this site, you agree to the Terms of U se and Privacy Policy. W ikipedia® is a registered trademark
of the W ikimedia Foundation, Inc. , a non-profit organiz ation.