Page 193 - DCOM208_BANKING_THEORY_AND_PRACTICE

Banking Theory and Practice

Notes Post-liberalization, foreign banks and private banks, increasingly gained acceptability in
popular parlance and imagination, till now, rather than obscuring terms. RBI issued its
regulation regime for both foreign banks and private banks.
RBI issues a single class of banking license to all banks and thereby does not place any
restriction in the operations of foreign banks.

11.5 Keywords

Accrual: Something that accumulates or increases.
Capital: The money, property, and other valuables which collectively represent the wealth of
an individual or business.

FDI: Foreign Direct Investment.
Leeway: The amount of freedom to move or act that is available.
Liberalization: The act of making less strict.

License: A permit from an authority to own or use something, do a particular thing, or carry on
a trade.
Privatization: Changing something from state to private ownership or control.

Recommendation: Something that recommends, especially a favourable statement concerning
character or qualifications.
Reforms: The action or process of reforming an institution or practice.

Securities: The state of being free from danger or threat.
Subsidy: A sum of money granted to support an arts organization or other undertaking held to
be in the public interest.

11.6 Review Questions

1. What do you mean by “social-control” on banks imposed by the government?
2. Explain the principles on which the first phase of banking sector reforms was based.
3. What recommendations were given by Narsimham Committee regarding SLR and CRR?
4. What did the Narsimham Committee Report said about priority sector lending?
5. What accounting policies were recommended in Narsimham Committee Report?

6. When was Narasimham Committee (ii) reappointed by government? Explain the focus
areas of the committee.
7. Explain the recommendations that were given in Narasimham Committee Report (ii).

8. What do you mean by assessment of financial sector reforms?
9. Briefly explain the concept of liberalization in banking sector.
10. Explain liberalization of banks in India.

11. What is the impact of liberalization in banking sector?

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