Question

Which of the following is/are the major reforms the Govt has introduced in the banking sector?
A. Dismantling the complex system of interest rate controls
B. Eliminating prior approval of the RBI for large loans
C. Introduction of capital adequacy norms and a few other prudential norms

• A. Only (A)
• B. Only (B)
• C. Only (C)
• D. All (A), (B) and (C)

Answer 1

The correct option is C Only (C)

The major reform which the government has introduced in the banking sector is the introduction of capital adequacy norms and a few other prudential norms. Capital adequacy ratio measures the ratio between bank's capital to its risks. It is also known as Capital to risk asset ratio.