A Bank is a monetary establishment licensed to accept, deposit, and make loans. There are various kinds of banks including retail banks, commercial or corporate banks, and investment banks. In the major countries, banks are synchronized by the national government or central bank.The first committee known as the Narasimhan Committee (Committee on the Financial System – CFS) was appointed by Manmohan Singh as India's Finance Minister on 14 August 1991, and the second one (Committee on Banking Sector Reforms) was appointed by P. Chidambaram as Finance Minister in December 1997. The banking and financial committees in India are banks that are monetary establishments licensed to accept, deposit, and make loans. Banks may also supply economic assistance such as wealth management, currency exchange, and safe deposit chests. There are various kinds of banks including retail banks, commercial or corporate banks, and investment banks. In the major countries, banks are synchronized by the national government or central banks.

Banking and Financial Committees PDF

Important Banking And Financial Committees In India PDF 

The important banking and  finance committees in  India are

 

Banking & Financial committees	Headed By
New Bank License	Bimal Jalan
NBFC (Non-Banking Financial Company)	AC Shah
Non Performing Assets	Khanna Committee
Banking Sector Reform	Narasimhan Committee
caElectronic Fund Transfer	Mrs. KS Shree Committee
Payment Bank is a recommendation of	Nachiket Mor
Concept of a weaker section	Ghose Committee
Customer Service in Banks	Goiporia Committee
IRAC Norms	Narasimhan Committee
Assets Reconstruction Committee	Narasimhan Committee
Single Window Counter	Mahadevan Committee
Computerization of the Banking Industry	Rangarajan Committee
Technology Issues In the Banking Industry	WS Saraf Committee
Teller  System	Talwar Committee
Customer Service	Talwar Committee
Willful Defaulter	SS Kohli Committee
Rehabilitation of sick industrial Unit	SS Kohli Committee
Rationalization of staff Staff strength in Banks	SS Kohli Committee
Financial Sector Reform	Raghuram Rajan Committee
Licensing of New Urban- Cooperative Banks	Marathe Committee
Regional Rural Banks	ML Dantwala Committee
Agricultural Financial and Cooperative Societies	Purshottam Das Committee
Cooperative Societies	RN Mirdha Committee
Self-Help Group & Role of NGO	Kalia Committee
Relating to funds and malpractices in Banks	Ghose Committee
To regulate payments and settlement for Digital Payments	Ratan Watal Committee
Service Area Approach	Ojha Committee
Lead Banking system	Gadgil Committee (1969)
Lead Banking scheme (Review)	UK Sharma Committee
Soiled Bank Notes	Hathi Committee
Working Capital Finance in Banks	IT Vaz Committee
Term Loan to SSI	Tambe Committee
Education loan scheme	Kamath Committee
Small Scale Industry	Karve Committee
Pay Scales of Bank Officers	Pallai Committee
Inspection System of Banks	R Jilani Committee
Foreign Exchange Markets in NRI Investment In India	Sodhani Committee
Trading in PSU Banks	SS Nadkarni Committee
Mutual Fund Scheme	Vaghul Committee
Reform in Small Savings	YV Reddy Committee
CIBIL has been incorporated on the recommendation of	RBI Siddiqui Committee
BC Model was introduced on the recommendation of	H R Khan Committee
“Factoring”	Kalyan Sundaram

 

These 43 committees are the important banking and financial committees in India that are established by RBI under different committee heads from period to period,

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What is the Finance Commission of India?

• The Finance Commission is a constitutional body for the allocation of certain revenue resources between the union and the State Governments.
• It was established under Article 280 of the Indian Constitution by the Indian President.
• It's not a permanent body and the president of India constitutes the Finance Commission every fifth year or at such earlier times, as he/she considers necessary.
• The primary function of the Finance Commission revolves around making recommendations on the distribution of financial resources between the Union Government and the State Governments.

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Functions of The Finance Commission of India

The functions of the finance committee are in three separate forms they are 

• Public accounts committee
• The estimates committee
• Committee of Public Undertaking

Article 280 Of the Indian Constitution UPSC

• Article 280 of the Constitution of India, in 1950 provides the financial commission, a quasi-judicial body.
• Article 280 (1) states that the president shall, within two years from the commencement of this Constitution and thereafter at the expiration of every fifth year or at such earlier time as the president considers necessary.
• The President of India should lay out a Finance Commission within two years of the Indian Constitution’s reception and every five years thereafter.
• The Commission shall be tasked with making recommendations to the President on: 
• Allocation between the Union and the States of the net earnings of taxes that are to be, or maybe, divided between them; the distribution between the States of the respective shares of those earnings; 
• The principles that should govern grants from the Consolidated Fund of India to states; or any matter assigned to the Commission by the President.
• The Commission shall specify its method of operation and shall have such powers in carrying out its responsibilities as Parliament may grant by law.

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Key Role Of Finance Commission In India

• The Finance Commission is the constitutional body that recommends how tax revenues collected by the Central Government should be distributed among the center and various States in the country.
• The finance commission distributes the proceeds of Income Tax between the Union and the State.
• The President under the Article formulates the recommendations of the finance commission before the two houses of parliament namely Lok Sabha and Rajya Sabha.
• The finance commission also regulates the rules governing the grants in support of the revenues of the state out of the consolidated fund of India.

4R Framework Of Banking Sector

In 2017, the 4R framework was a part of the government’s strategy to address the issue. It focused on recognizing stressed assets as Non-Performing Assets (NPAs). The 4Rs in the framework are.,

• Recognition - Transparent acknowledgment of the true extent  of bad loans on the bank’s books
• Resolution - Finding solutions to recover the money owed on bad loans, such as restructuring debt, selling assets, or taking legal action.
• Recapitalization - Infusing fresh capital into public sector banks (PSBs) to strengthen their financial position.
• Reforms - Long-term improvements in the banking system to prevent future bad loans.

What is the Banking Committee of India?

• The Banking Commission was established on 29 January 1969.
• This committee analyzes the banking costs, effects of legislation, and banking procedures, including non-banking financial intermediaries. 
• The banking committee has cognizance of all matters relating to the Department of Banking, Banks, saving banks, bank and trust companies, savings and loan associations, credit unions, the supervision of the sale of securities, fraternal benefit societies, and secured and unsecured lending. 

Functions Of Banking Committee In India

The functions of the Banking Commission of India

• Monitoring Financial Institutions
• Investing Complaints
• Assessing Fines
• Approving Banks
• Recommending Interest Rates 

The key role of the Banking Committee in India

• Banking Codes and Standards Board of India is an Independent body monitors banks and ensures they adhere to voluntary codes and standard for fair customer treatment.
• Indian Bank’s Association represents banking companies in India and helps them implement new systems.
• Banks Board bureau advises the central government on a variety of matters, including the appointment of board members, the management structure of institutions, and performance appraisal systems.

Regulatory Framework of Banking in India 

A combination of laws and the Reserve Bank of India regulates the Indian banking system:

Banking Regulation Act (1949)

The Banking Regulation Act of 1949 is India's central law regulating all banking institutions in India. This act has some objectives, they are.,

• Regulating the financial industry: The act sets regulations for the financial industry.
• Maintaining banking stability: The act aims to maintain the banking industry's steady expansion. 
• Minimum capital requirements: The act establishes minimum capital requirements for banks. 
• Protecting depositors' interests: The act protects the interests of depositors.
• Encouraging banking institutions: The act encourages the sound development of banking institutions in India.
• Adjusting the credit system: The act adjusts the credit system and monetary funds to higher payable interest. 

Reserve Bank of India Act (1934)

The Reserve Bank of India Act of 1934 established the Reserve Bank of India (RBI) and the Banking Regulation Act, of 1949 (the BR Act) are the primary pieces of legislation governing the banking sector in India.

• Transactions related to foreign exchange, current, and capital account transactions are also regulated by RBI.
• To implement the regulatory policies for the banks in India, the RBI Act and the BR Act empower the RBI to issue rules, regulations, directions, and guidelines on a wide range.
• Transactions related to foreign exchange, current, and capital account transactions are also regulated by the RBI.
• There are also other regulatory supplementary pieces of legislation regulating the banking sector such as;

• The recovery of debts due to the Banks and Financial Institutions Act, 1993 (the RDDB Act).
• The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (the SARFAESI Act).
• The Insolvency and Bankruptcy Code, 2016 (the 2016 Code); and
• The Payment and Settlement Systems Act, 2007 (the PSS Act).

Non-Banking Financial Company – Peer-to-Peer Lending Platform (Reserve Bank) Directions, 2017

• NBFC is a non-banking financial institution that offers financial services but does not have a banking license.NBFCs are also known as nonbank financial institutions (NBFIs).
• NBFCs are important to the economy because they provide financial services to people and businesses.
• NBFC is a company registered under the Companies Act 1956 which is engaged with the business of loans and advances.
• The lenders and the borrowers have to register on the website of the P2P lending platform.
• The platform conducts a screening of potential borrowers and lenders before allowing them to participate in their business.

Insolvency and Bankruptcy Code (IBC), 2016

• This code provides a framework for resolving insolvency and bankruptcy proceedings in India.
• Insolvency and Bankruptcy Code,2016 (Code) provides for a specialized forum to oversee all insolvency and liquidation proceedings for individuals, SMEs, and corporations.
• Insolvency is when an individual or company can no longer meet their financial obligations to lenders as debts become due.
• The Insolvency and Bankruptcy Board of India (IBBI) has been appointed as a regulator and it can oversee the proceedings.
• IBC provides financial information to the debtor and passes it to the creditor by managing the debtor’s assets, it lasts for 180 days period any legal action against the debtor is prohibited during this period.

Good and Services Tax (GST) Act, 2017  

• Goods and Services Tax shortly known as the central government passed GST in the parliament on 29th March 2017 and came into force on 1st July 2017.
• To achieve the idealogy of ‘One Nation One Tax’ GST has replaced multiple indirect taxes existing under the previous tax regime.
• To subsume a majority of the indirect taxes in India, had several erstwhile indirect taxes such as service tax, value added tax (VAT), Central Excise, Etc.,
• One of the primary tasks of GST is to remove the cascading effect of taxes, due to the different indirect tax laws, taxpayers could not set off the tax credits of one tax against the other.
• GST, Taxpayers can claim an input tax credit only on invoices uploaded by their suppliers.

Winding Up of Banking and Financial Committees in India

As addressed in my article about the banking and financial committees in India it is the nature of work why it was started and when it came into force. This article under the topic of banking and financial committees will help the aspirants who are preparing for all the government exams which are conducted separately by the central and state government of India.

Faq’s of the Banking and Financial committees in India

Q. Which committee is related to the Banking sector?

The committee related to the banking sector named “The Narasimham-II Committee” 

Q. What is the role of financial committees in India?

“Financial Committee” is a system that helps the parliament of India to keep control over the finances of the country.

Q. What are the committees of Banking in India?

• The First Narasimhan Committee 1991
• The Verma Committee 1996
• The Khan Committee 1997
• The Second Narasimhan Committee 1998.

Q. How many financial committees are there in India?

There are three financial committees in India they are namely as 

• Estimates Committee
• Public Accounts Committee (PAC)
• The Committee on Public Undertakings (CoPU)

Q. Which is the largest committee in India?

The largest committee in India is known as The Estimates Committee it has 30 members and all the members are from Lok Sabha.

Q. Which committee merged banks?

Narasimham Committee recommended the government merge banks into a three-tiered structure.