Narasimham, the pioneer of banking and financial reform in the country, died in Hyderabad on April 21, 2021 at the age of 94. In 1977, he served as the 13th Governor of the Reserve Bank for seven months. Due to the reports and recommendations of the two committees under his chairmanship. On the banking horizon of the country came a new generation of private banks like HDFC, ICICI. He is the father of the concept of ‘Bad Bank’ which came up in the budget of 2021-22. In the last two-four years, 12 public sector banks have been consolidated and a handful of super-banks have emerged, to the credit of the Narasimham Committee. The country’s banking world is currently in debt. In 1991, the Narasimham Committee, which had earlier calculated the NPAs correctly, recommended that for the first time in four consecutive quarters, non-performing loans (NPAs) should be classified as NPAs. Which was later extended to 90 days. It was under his leadership that the reforms in the financial sector laid the foundation for an efficient and open banking system and brought about a period of liberalization in India’s economic sector. The country’s civic co-operative banks and rural regional banks were forced to compete directly and acquire the necessary capacity, following the implementation of the recommendations of the Narasimham Committee, which has been in force since 1993. Statutory..Liquidity Ratio (SLR) and Cash Reserve (CRR), High Level Capital Adequacy Ratio (CRAR) to be gradually reduced to reasonable level and interest rates to be deregulated.
Reference: E-Paper loksatta