Banking Sector Reforms of 1991 and Agricultural Credit

Thirty years ago, in 1991, India adopted major reforms in the banking sector. These reforms were carried out based on the recommendations of two committees: the first, Narasimham Committee (1991) and the second, Narasimham Committee (1998). These reforms brought some significant changes in the disbursement of agricultural credit in India.

The first Narasimham Committee aimed to bring flexibility in the operations of banks, increasing their profitability, and giving banks some level of autonomy in their functioning. The second generation of reforms was more concerned with the health of the banking system and brought some structural changes.