What was the effect of financial sector reforms?

Setting up of private sector banks

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Foreign investment limit in banks was raised to around 50%

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Banks fulfilling certain conditions were given freedom to set up new branches without the RBI approval

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All of the above

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Solution

The correct option is D All of the above
The reform policies led to the establishment of private sector banks, Indian as well as foreign. Foreign investment limit in banks was raised to around 50 per cent. Those banks which fulfil certain conditions have been given freedom to set up new branches without the approval of the RBI and rationalise their existing branch networks. Though banks have been given permission to generate resources from India and abroad, certain aspects have been retained with the RBI to safeguard the interests of the account-holders and the nation.

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