The COVID-19 crisis continues to dominate our news coverage, as it should. And while we’ve been doing many episodes on the pandemic, a couple of deep dives into policy issues (a trademark of this podcast) had to be benched along the way. We recorded this podcast last month, just after former RBI governor M. Narasimham passed away, with the aim of understanding his legacy in the context of the current challenges that the banking sector is facing.
Narasimham is perhaps the most influential banker of post-independent India. The reports prepared by the two Committees that he chaired — the Narasimham Committee on Financial System (1991) and the Narasimham Committee on Banking Sector Reforms (1998) — are still the foundational documents for any discussion on banking sector reforms and banking policy. He is also credited with paving the way for epochal moves such as bank mergers, the emergence of new-generation private banks, and asset reconstruction companies.
But more than two decades after the two Nararimham Committees gave their reports and recommendations, India’s banking sector remains plagued by a host of problems, from high NPAs to poor governance, and a disconnect from developmental priorities. So what has been the legacy of Narasimham and the two committees that he chaired? How will India’s banking history view his role and contribution to India’s banking sector? To throw light on these questions, we spoke with Amol Agrawal , an economic historian and faculty at Ahmedabad University.
