Banking · Banking Reforms
The Narasimham Committee II (1998) focused more intensely on the structural aspect of the banking sector. One of its key recommendations regarding Public Sector Banks (PSBs) was to:
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- 1Immediately privatize all PSBs within a two-year time frame.
- 2Mandate that PSBs focus exclusively on infrastructure lending, leaving retail to private banks.
- 3Reduce the government's equity stake in PSBs to below 51% to enhance management autonomy and promote competition.✓
- 4Increase the government's equity stake in PSBs to 100% to guarantee full stability.
Correct answer
Reduce the government's equity stake in PSBs to below 51% to enhance management autonomy and promote competition.
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