4.Financial Sector Reforms A)Banking Sector Reforms B)Capital Market Reforms C)Insurance Sector Reforms A)Banking Sector Reforms- Narasimham Committee 1. Lowering of SLR- Statutory Liquidity Ratio -23% 2. Lowering of CRR- Cash Reserve Ratio – 4%

3. Deregulation of Interest Rates- Healthy Competition,Operational Efficiency 4. Introduction of Prudential Norms – Related to recognition of income, classification of assets 5. Introduction of Capital Adequacy Norms – Capital to Risk Weighted Assets -9% from 2004- helps banks to absorb a reasonable level of losses. 6.Entry of New Private Sector Banks – 7. Freedom of Operations – New Branches, Extension Counters.

8. Special Recovery Tribunals- Quick recovery of loan 9. Board for Financial Regulation and Supervision(BFRS) – Regulates and Supervises the activities of banks, financial institutions and non –bank finance companies. B) Capital Market Reforms – SEBI as Statutory Body- SEBI – 1988

Statutory Body – 1992 2. Primary Market Reforms – All information about market. 3. Investments by FIIs – Primary and Secondary Markets. 4. Establishment of NSE – NSE – 1992, Transparency and Operational efficiency in Secondary Market. 5. Strengthening the Government Securities Market – Auction System, Setting up of the Securities Trading Corporation of India.

C) Insurance Sector Reforms- Monopoly of the Govt.- Insurance Regulatory and Development Authority Act(IRDA)- 1999