Economics · Banking Sector Reforms

Analyze the following seven statements concerning the regulatory framework and operational changes impacting the Indian banking sector post-1991: Statement I: The current regulatory framework mandates the establishment of an Asset Reconstruction Company (ARC) only by Public Sector Banks (PSBs) to handle their stressed assets, not by private entities. Statement II: The introduction of Risk-Based Supervision (RBS) by the RBI shifted the focus from merely checking compliance with rules (rule-based) to assessing a bank's internal risk management systems and capital adequacy relative to its overall risk profile. Statement III: The reforms led to the reduction of the Debt-to-Equity Ratio requirements for all new infrastructure projects financed by banks to reduce the overall project risk for lenders. Statement IV: The Banking Ombudsman Scheme was established as a result of the financial sector reforms to provide a simple, cost-effective grievance redressal mechanism for bank customers. Statement V: The RBI maintains a framework governing the Loan-to-Value (LTV) ratio for housing loans extended by banks to mitigate systemic risk in the real estate market. Statement VI: The post-reform period saw the introduction of the Core Banking Solution (CBS) across major PSBs, linking branches and enabling the concept of the bank as a single entity. Statement VII: The Narasimham Committee I recommended that banks should have the flexibility to manage their workforce, leading to the introduction of Voluntary Retirement Schemes (VRS) to improve efficiency. Which of the combinations below correctly identifies the valid statements?