Narasimham Committee on Banking Sector Reforms (1998) The purpose of the Narasimham-I Committee was to study all aspects relating to the structure, organization, functions and procedures of the financial systems and to recommend improvements in their efficiency and productivity. The Narasimham-II Committee was tasked with the progress review of the implementation of the banking reforms since 1992 with the aim of further strengthening the financial institutions of India.[4] It focussed on issues like size of banks and capital Adequacy ratio among other things The 1998 report of the Committee to the GOI made the following major recommendations: Autonomy in Banking Greater autonomy was proposed for the public sector banks in order for …show more content…
The committee had highlighted that 'priority sector lending ' was leading to the build up of non-performing assets of the banks and thus it recommended it to be phased out.[10] Subsequently, the Narasimham Committee-II also highlighted the need for 'zero ' non-performing assets for all Indian banks with International presence.[10] The 1998 report further blamed poor credit decisions, behest-lending and cyclical economic factors among other reasons for the build up
In response to this panic, a committee was established to find the flaws of the current banking system. This committee, the National Monetary Commission, found there were two main flaws dominating the system. First, the currency was not responsive to changes in demand. (Born...13). This meant that the bank had a fixed amount of currency, regardless of the
The Basel Committee on Banking Supervision has developed a regulatory capital framework for operational risk measurement and introduced three approaches: the Basic Indicator Approach (BIA), the Standardized Approach (SA) and the Advanced Measurement Approach (AMA).The identification and measurement of operational risk can be viewed as following either the top down approach or the bottom up approach depending on the method used to calculate the risk charge. In the top down approach, the financial data is extracted from the Balance Sheet and Profit and Loss statement. This method may not result in the proper capturing of risks nor does it help in risk mitigation. This approach corresponds with the Basic Indicator Approach and the Standardized Approach of Basel II Accord. The third approach of the Accord i.e. Advanced Measurement Approach, is consistent with bottom up approach in which the regulatory capital requirement will be defined by the estimate generated by the internal operational risk measurement system (Rajeev, 2004).
In this article author Alka Sharma discuss about the economic reforms that took place in Indian financial sector. This type of reforms has gaining more importance as financial intermediaries and also help in opening new opportunity for growth and development of various financial services. As a result of this new reforms there is a shift in financial services from quantitative to qualitative services. Financial institution is highly
Apr 23, 2011 - Essay topics ... 3) Are the efforts taken by banks to popularise banking been successful? ... Banking related general awareness -- 6 2013 TWO.
During the decade of the most innovative financial services PSBs are activated , resulting in its infancy . The World Bank also believes that the Indian banking system is still a large number of inefficient state-controlled system , rather than compete with each other . Some issues are framed questionnaire to gauge the views of executives PSBs to improve financial services related to the main subsidiary bodies. The main issues to improve the results of the subsidiary bodies of the principal subsidiaries of the 150 officials, agency personnel management related financial services has been discussed below.
Negative trend in Net NPA presents the efficiency of the bank. Every bank tries to minimize the Net NPA and should control them. All the banks selected for study exhibited a positive high growth rate in the assets. The public sector banks presented a high growth of 218.65% in the year 2012-13 for Andhra Bank and State Bank of India with a growth rate of 102.27 in the year 2015-16. In case of ICICI Bank 110.90% in the year 2015-16 will be highest growth in the value of Net Non Performing Assets.
Table 4.3 shows the trend of non-performing loans ratio by the bank in general for
This study report is based upon secondary source of information from the documents and databases of the Bank. Though I tried my level best to produce a comprehensive and well-organized report on the “Credit Operations and Risk Management Practices of BASIC Bank Ltd”, some limitations were yet present there:
ASSET QUALITY OF THE BANKS: As per the RBI the banking system in India is self-sufficient & is well funded. The asset quality of the banks is however a concern. Assets of the bank are largely loans such as mortgages, government bonds & cash. A healthy level of asset quality is imperative for survival of the bank. In India’s per the RBI's latest report released on June 17 the banking stability indicator (BSI) that indicates banks financial stability worsened between the quarter of September 2016 to March 2017 due to a deterioration in asset quality and profitability. The report clearly stated that the gross non-performing assets (GNPAs) of some scheduled commercial banks (SCBs) may rise from the existing 9.6 per cent in the month of March
Shri Ajaybhai Patel who has been elected unopposed for the last three tems, on assuming the chame for the first time as a Chairman on 06-01-2003, introduced action plans to improve the profitability of the bank and impressed upon the importance of recovery in NPAs. Under his leadership for the first time in the co-operative sector in the State “Lok Adalat” was used to settle chronically overdue accounts and it received good response from the borrowers.
Non Performing Asset means an asset or account of borrower, which has been classified by a bank or financial institution as sub-standard, doubtful or loss asset, in accordance with the directions or guidelines relating to asset classification issued by RBI.
Despite the provisions, control and regulations of Reserve Bank of India, banks in India except the State Bank of India or SBI, continued to be owned and operated by private persons. By the 1960s, the Indian banking industry had become an important tool to facilitate the development of the Indian economy. At the same time, it had emerged as a large employer, and a debate had ensued about the nationalization of the banking industry. Indira Gandhi, then Prime Minister of India, expressed the intention of the Government of India in the annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalisation."[2] The meeting received the paper with enthusiasm.
With this brief introduction, I would like to address on two areas of concern of which India is facing today and Reserve Bank of India responses to tackle the same.
Many analysis viewed this action as opening of the floodgate of a spate of mergers and consolidations among the banks, but this was not to be, it took nearly a year for another merger. The process of consolidation is a slow and painful process. But the wait and watch game played by the banks seems to have come to an end. With competition setting in and tightening of the prudential norms by the apex bank the players in the industry seems to be taking turns to merge.
Banking Regulation 1949 is another legislation which governs the functions of RBI. Section 44 A of this Act lays down the procedure for amalgamation of banking companies and also states that bank mergers need to be sanctioned by RBI before taking effect. Among other issues, the Section could probably be the basis of the contentious issues which resulted in the delay of the notification of the whole Competition Act, followed by further delays in the notification of Sections of the Act dealing with mergers.