BANKING AFFAIRS

Detailed explanation-1: -The Narasimham Committee had recommended the creation of Regional Rural Banks. Regional Rural Bank (RRB) is also known as a small man’s bank. It was recommended for the development of the rural economy in India.

Detailed explanation-2: -It recommended a three tier banking structure in India through establishment of three large banks with international presence, eight to ten national banks and a large number of regional and local banks. This proposal had been severely criticized by the RBI employees union.

Detailed explanation-3: -The Narsimham committee conceptualised the creation of RRBs in 1975 as a new set of regionally oriented rural banks, which would combine the local feel and familiarity of rural problems characteristic of cooperatives with the professionalism and large resource base of commercial banks.

Detailed explanation-4: -The Nariman Committee in 1969 recommended a scheme to unite the commercials banks co-operative banks and government and semi-government agencies to work together for the socio-economic growth of the country. The Lead Bank Scheme was also introduced.

Detailed explanation-5: -The first Committee was set up in 1991 and is referred to as the Narasimham Committee-I and the 1998 Committee is known as the Narasimham Committee – II.