Question

Which committee made a number of suggestions to overcome the defects of the indian banking system?

• A. Dantwala Committee
• B. Narasimham Committee
• C. Khusro Committee
• D. Kelkar Committee

Answer 1

Answer: (B)

Narasimham Committee

In the year 1991, the first Narasimhan Committee made a number of recommendations in order to overcome the defects of the Indian banking system. The committee suggested a reduction in the statutory liquidity ratio, the abolition of branch licensing policy, setting up the Asset Reconstruction fund, etc. Based on these recommendations the government lowered the SLR and CRR, allowed the interest rates to be determined by the market forces, opened the banking sector for private enterprises also, etc.

Hence, option (B) is the correct answer.