Where “The Narasimham Committee” for Financial Sector Reforms has suggested to reduction in?
Q. Where “The Narasimham Committee” for Financial Sector Reforms has suggested to reduction in?
Answer: SLR, CRR and Priority Sector Financing
Notes: The key recommendations with respect to the banking sector were as follows:
Reduction in the Statutory Liquidity Ratio (SLR) and Cash Reserve Ratio (CRR): The Narasimham Committee had recommended bringing down the statutory pre-emptions such as SLR and CRR. It recommended that SLR should be reduced to 10% over a period of time. When reduced these rations, bank would have more funds in their hands to deploy them in remunerative loan assets. The committee also recommended that banks should get some interest on the CRR balanced.
The Narasimham Committee redefined the priority sector to include the marginal farmers, tiny sector, small business and transport sector, village and cottage industries etc. The committee also recommended that there should be a target of 10% of the aggregate credit fixed for the Priority Sector at least. Deregulation:

 

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