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      Question

      What is the primary purpose of the Tandon Committee

      recommendations in working capital finance?
      A To regulate interest rates on loans Correct Answer Incorrect Answer
      B To establish a framework for assessing working capital needs Correct Answer Incorrect Answer
      C To enhance financial inclusion in rural areas Correct Answer Incorrect Answer
      D To promote foreign direct investment in banking Correct Answer Incorrect Answer
      E To determine the capital adequacy ratio for banks Correct Answer Incorrect Answer

      Solution

      The Tandon Committee (1975) was formed to standardize the assessment of working capital requirements for businesses. It introduced norms for borrowing limits, ensuring that businesses maintain a reasonable stake in their short-term assets and do not over-rely on bank finance. 

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