Professional Documents
Culture Documents
Chapter
3
Reforms in Financial and Banking Sector
3-1
Introduction to Banking
G. Vijayaragavan Iyengar
Excel Books
Owing to 1991 crisis of balance of payment, the government appointed the Narsimham Committee on 14th August, 1991. It submitted its report, known as its first report, on 16th November 1991. The first phase of banking sector reform which began during 1992-93 was based on twin principles of "Operational
3-2
Introduction to Banking
G. Vijayaragavan Iyengar
Excel Books
ii.
vi. New Institution vii. Entry of Private Sector Banks viii. Branch Licensing Policy ix. Legislative Measures
3-3
Introduction to Banking
G. Vijayaragavan Iyengar
Excel Books
5% risk weight be considered for market risk for government and approved securities. Banks should attain a minimum CRR of 9% by 2000 AD and 10% by 2002 AD. Accrual of interest for income recognition should be done in 90 days instead of 180 days. Bank Chairman should be given a minimum of three years at the helm. All loans in doubtful/loss category should be identified and their realisable value determined. The start up requirements of Rs. 100 crore for new private sector banks should be hiked.
Copyright 2007, G. Vijayaragavan Iyengar
3-4
Introduction to Banking
G. Vijayaragavan Iyengar
Excel Books
3-5
Introduction to Banking
G. Vijayaragavan Iyengar
Excel Books
FINANCIAL
3-6
Introduction to Banking
G. Vijayaragavan Iyengar
Excel Books
3-7
Introduction to Banking
G. Vijayaragavan Iyengar
Excel Books
3-8
Introduction to Banking
G. Vijayaragavan Iyengar
Excel Books
CHAIRMANSHIP OF SH. B.D. NARANG ON LARGE VALUE FRAUDS (RUPEES ONE CRORE AND ABOVE)
There is always a time lag between the detection and reporting of a fraud It is not the lacunae in the rules but the non-observance of the same, which leads to the fraud.
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Introduction to Banking
G. Vijayaragavan Iyengar
Excel Books
iii. Rotation of Audit Partners iv. Disclosures v. Replacement of Auditors vi. Audit firm to file a 'certificate of independence vii. Empowering Audit Committees viii. Certification of financial reports by the CEO and CFO ix. Supervising the work of Auditors x. Changes in the structure and composition of Board of Directors xi. Setting up a Corporate Serious Fraud Office (CSFO)
Copyright 2007, G. Vijayaragavan Iyengar
3-10
Introduction to Banking
G. Vijayaragavan Iyengar
Excel Books
a)
b) c)
d)
3-12
Introduction to Banking
G. Vijayaragavan Iyengar
Excel Books
f)
3-13
Introduction to Banking
G. Vijayaragavan Iyengar
Excel Books