Narasimham Committee Recommendations — Prelims Strategy

Prelims Strategy

For Prelims, the strategy for Narasimham Committee recommendations must be fact-focused, emphasizing specific details, years, and key terms. Aspirants should prioritize memorizing:

1
Years and Chairmanship: — Remember M. Narasimham chaired both committees, and the years 1991 (Narasimham I) and 1998 (Narasimham II).
2
Core Recommendations: — Distinguish clearly between the recommendations of Narasimham I and II. For Narasimham I, focus on SLR/CRR reduction, interest rate deregulation, introduction of CAR (Basel I), new private banks, and DRTs. For Narasimham II, focus on raising CAR (towards Basel II), universal banking, bank consolidation, technology upgradation, and the legal framework for foreclosure (SARFAESI Act precursor).
3
Key Institutions/Acts: — Know the full forms and purpose of CAR, NPA, SLR, CRR, DRT, SARFAESI Act, and ARCs. Understand which committee proposed or influenced their creation.
4
Context: — Remember the 1991 Balance of Payments crisis for Narasimham I and the Asian Financial Crisis for Narasimham II.
5
Keywords: — Be familiar with terms like 'prudential norms,' 'statutory pre-emptions,' 'directed credit,' 'universal banking,' and 'asset reconstruction.'

Practice MCQs that test your ability to differentiate between the two committees' recommendations and identify the correct year or associated policy. Pay attention to 'NOT correct' or 'incorrect' statements in questions. Create flashcards for quick recall of these specific facts.