The recommendations of the Narasimham Committee-I have had a significant impact on the Indian financial sector. Here’s an overview of the implementation status of some of the key recommendations:
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Liberalization of the banking sector: The committee recommended the liberalization of the banking sector by allowing private sector banks to enter the industry.
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Recapitalization of public sector banks: The committee recommended that the government should recapitalize public sector banks to improve their financial position.
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Reduction of Statutory Liquidity Ratio (SLR) and Cash Reserve Ratio (CRR): The committee recommended a gradual reduction in the SLR and CRR to free up funds for banks to lend.
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Strengthening of the banking system: The committee recommended the strengthening of the banking system through measures such as improving asset quality, risk management, and corporate governance.
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Deregulation of interest rates: The committee recommended the deregulation of interest rates to allow banks to determine their lending and deposit rates based on market conditions.
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Establishment of Asset Reconstruction Companies (ARCs): The committee recommended the establishment of ARCs to take over non-performing assets from banks and recover their value.
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Promotion of secondary markets: The committee recommended the promotion of secondary markets for government securities and corporate bonds to provide liquidity and transparency in the financial system.
Overall, the Narasimham Committee-I recommendations were aimed at improving the efficiency, competitiveness, and stability of the Indian financial sector.
