Current Affairs · Economic Reforms
The Narasimham Committee I (1991) recommendations were crucial for financial sector reforms under India's liberalization process. Which of the following accurately represents a core recommendation related to banking sector structural reforms?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Mandating all commercial banks to open a minimum of 50 per cent of their new branches in unbanked rural areas to counter urban concentration.
- 2Permitting the establishment of new private sector banks to foster competition and introduce modern banking practices, in line with international norms.✓
- 3Allowing full 100 per cent Foreign Direct Investment (FDI) in domestic banks without any regulatory prerequisites.
- 4Immediate abolition of the Statutory Liquidity Ratio (SLR) and Cash Reserve Ratio (CRR) to enhance global capital flow.
Correct answer
Permitting the establishment of new private sector banks to foster competition and introduce modern banking practices, in line with international norms.
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