Narasimham Committee Recommendations — Policy Reforms

Entry	Year	Description	Impact
Recovery of Debts Due to Banks and Financial Institutions Act	1993	Enacted following Narasimham Committee I's recommendation, this Act led to the establishment of Debt Recovery Tribunals (DRTs) and Debt Recovery Appellate Tribunals (DRATs) to facilitate speedy recovery of debts owed to banks and financial institutions.	Significantly improved the legal framework for debt recovery, reducing the burden on civil courts and expediting the resolution of Non-Performing Assets (NPAs).
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act	2002	Introduced following Narasimham Committee II's call for a stronger legal framework, this Act empowers banks and financial institutions to enforce security interests without court intervention in cases of loan default.	Provided banks with a powerful tool for NPA resolution, allowing them to take possession of secured assets directly, thereby reducing recovery timelines and costs.
Banking Regulation (Amendment) Act	2020	Extended regulatory oversight of the Reserve Bank of India (RBI) to cooperative banks, bringing them under stricter supervision, a move aligned with the broader goal of strengthening financial stability and regulatory coherence.	Enhanced the stability and governance of cooperative banks, protecting depositors' interests and integrating them more fully into the prudential regulatory framework envisioned by the committees.
Insolvency and Bankruptcy Code (IBC)	2016	While not a direct amendment to banking acts, the IBC is a comprehensive law for insolvency resolution of corporate persons, partnership firms, and individuals. It provides a time-bound process for resolving insolvencies.	Revolutionized NPA resolution by providing a unified, time-bound, and creditor-driven framework, significantly improving the recovery rates for banks and financial institutions, building on the spirit of earlier debt recovery reforms.