Narasimham Committee on banking Sector Reforms

First Narasimham  Committee was  formed  in  1991 while Second Narasimham  Committee  was established in 1998 and  both  committee were  related to Banking  Sector  Reforms.

Recommendation of First Narasimham Committees were -

• Reduction in the Statutory  Liquidity  Ratio (SLR) - The  Narasimham  Committee  had  recommended  that the SLR should  be reduced  to 25%  over  the period  of time.

• Reduction in the Cash  Reserve  Ratio (CRR) - Committee recommended  that CRR  should be reduced  to  10% over the period  of   time.

• Redefining  the priority  sector - Committee redefined priority sectors which can be boosted through credit extension. It also mentioned that priority sectors should include Marginal  farmers, Tiny  sector Small  business  and  transport   operators, village  and  Cottage  Industries.  Narasimham  Committee  recommended  that   there  should  be  a target of minimum 10% of the aggregate credit fixed  for the Priority Sector .

• Deregulation of the Interest   Rates.
• Asset   Classification and defining  the Non  Performing  Assets.
• Improve  transparency  in  the  banking  system
• Tribunals  for  recovery  of Loans.
• Tackling  doubtful  debts
• Restructuring  the  banks
• Allow  entry  of the new  private  Banks