Harmonize the role and operations of development finance institutions (DFIs) and banks.
The Khan Working Group, established by the RBI in 1997, aimed to reform the financial sector by harmonizing the roles of development finance institutions (DFIs) and banks. This was crucial as DFIs were traditionally focused on long-term financing, while banks primarily provided short-term credit. The group's recommendations sought to enhance efficiency and ensure better resource allocation in the financial system, ultimately supporting economic growth. The concept of Maximum Permissible Bank Finance (MPBF) was also examined, but the primary focus was on the integration of DFIs and banks.
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