The Narasimham Committee I, constituted in 1991, is primarily known for recommending which of the following reforms?

easy Q11 of 15

Financial Awareness - Risk, Stability & Emerging Finance

AIntroduction of prudential norms and deregulation of interest rates

BIntroduction of capital adequacy norms

CReforms in monetary policy and financial markets

DStrengthening banking fraud detection mechanisms

Step-by-Step Solution

Step 1: Identify the focus of Narasimham Committee I
The Narasimham Committee I was constituted in 1991 to reform the Indian banking sector by improving efficiency, transparency, and financial discipline.
Step 2: Analyze the options based on known recommendations
The committee recommended the introduction of prudential norms for income recognition, asset classification, and provisioning, along with deregulation of interest rates. Capital adequacy norms were strengthened later by Narasimham Committee II.
Final Answer:
Introduction of prudential norms and deregulation of interest rates → Option A
Quick Check:
Narasimham Committee I = prudential norms + interest rate deregulation ✅

Quick Trick: Remember Narasimham I = prudential norms + interest rate deregulation.

Common Mistakes:

Confusing Narasimham Committee I with Narasimham Committee II, which focused on capital adequacy and consolidation.

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