BANKING AFFAIRS

Detailed explanation-1: -The Indian Banking system immensely developed after nationalization but the rural and weaker section of the society was still not covered under the system.To solve these issues, the Narasimham Committee in 1974 recommended the establishment of Regional Rural Banks (RRB).

Detailed explanation-2: -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-3: -As a result, five RRBs were set up on 2 October 1975 on the recommendations of the Narsimhan Committee on Rural Credit, during the tenure of Indira Gandhi’s government. The purpose was to include rural areas into the economic mainstream since around 70% of the Indian population was rural.

Detailed explanation-4: -Manmohan Singh set up Narasimham Committee to analyze India’s banking sector and recommend reforms. The Committee was set up under the chairmanship of Maidavolu Narasimham. He was the 13th governor of the Reserve Bank of India (RBI) from 2 May 1977 to 30 November 1977.