The Government of Republic of Republic of India constituted a 9-member committee nether the chairmanship of Mr. M. Narasimham, Retired RBI Governor, on 14th August 1991 for making recommendations on existing fiscal organization in addition to to plough over suggestions for improving the existing structure. The commission submitted its study to the Finance Minister inwards Nov 1991 which was placed on the tabular array of Parliament on 17th Dec 1991. The salient recommendations of the commission are :
- 4-tier banking organization should live on introduced inwards the country.
Branch licensing organization for opening novel banking firm branches should live on abolished.
- I Tier – three or iv International Banks
- II Tier – 8 or 10 National banks
- III Tier – Regional Banks
- IV Tier – Rural Banks
A liberal sentiment should live on adopted for allowing unusual banks inwards the country. Both unusual in addition to domestic banks should live on treated at par. SLR for banks should live on curtailed to the grade of 25% inside side past times side v years. CRR should every bit good live on curtailed inwards diverse phases.Banks should live on given to a greater extent than autonomy in addition to the directed credit should live on abolished. Primary targets for credit should live on redefined in addition to such credit should non live on to a greater extent than than 10% of full credit.Computerization of banks should live on promoted. Banks should live on authorized to appoint banking official at their ain discretion. The dual command of RBI in addition to Finance Ministry on banks should live on abolished in addition to RBI should component alone every bit a regulatory authorization of banking organization inwards the economy. RBI’s instance should non live on included inwards the administration boards of banks. Only Government instance should live on there. Granting resources to evolution finance institutions on concessional rates of involvement should live on abolished inwards phases inside side past times side three years. These institutions should live on allowed to mobilize resources from opened upwards marketplace on competitive rates. Quick in addition to effective liberal mental attitude should live on adopted inwards the policy related to upper-case missive of the alphabet market. System of getting prior permission past times the companies for their novel portion issues should every bit good live on abolished.