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    Question

    With reference to the Narasimham Committee Reports,

    consider the following statements: 1.The first Narasimham Committee (1991) focused on financial sector liberalization. 2.The second Narasimham Committee (1998) emphasized the recapitalization of weak banks and reduction of NPAs. 3.Both committees recommended maintaining the Statutory Liquidity Ratio (SLR) at 50% to ensure liquidity. Which of the statements given above is/are correct?
    A 1 and 2 only Correct Answer Incorrect Answer
    B 1 and 3 only Correct Answer Incorrect Answer
    C 2 and 3 only Correct Answer Incorrect Answer
    D 3 only Correct Answer Incorrect Answer
    E 1, 2 and 3 Correct Answer Incorrect Answer

    Solution

    Explanation: •Statement 1: True — The first report (1991) initiated liberalization, autonomy, and prudential norms. •Statement 2: True — The second (1998) focused on NPAs, recapitalization, and consolidation. •Statement 3: False — It recommended reducing SLR (from 38.5% to 25%) to free resources for private lending.

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