|1 & ;
3 Jul 1991
||External Payments Crisis.
Rupee Devalued in two stages. Cumulative devaluation about 18
percent in USD terms.
Narsimahmam Committee Report suggested far reaching reforms in the
Indian Banking sector. These included a phased reduction in the SLR
and CRR as well as accounting standards, income recognition norms
and capital adequacy norms.
||A dual exchange rate system
called Liberalised Exchange Rate Management System (LERMS)
introduced. This was the initial step to enable a transition to a
market determined exchange rate system.
recognition and asset classification norms introduced. Provisioning
and Capital adequacy standards specified. Indian Banks required to
fulfill these norms by 1994 and 1996.
||C. Rangarajan appointed
formulated �Insider Trading Regulations�.
||Unified Exchange rate.
for the establishment of private sector banks issued. This heralds a
new policy approach aimed at fostering greater competition.
||Nationalised Banks allowed
to tap the capital market to strengthen their capital base.
Stock Exchange commenced operations
||�Committee on Reform of
the Insurance Sector�, RN Malhotra.
convertible on the Current Account. Acceptance of Article VIII of
the Articles of Agreement of the IMF.
||Lending rates of commercial
banks deregulated. Banks required to declare their Prime Lending
Reserve Bank Note Mudran Limited established as a fully owned
subsidiary of the Reserve bank. Commenced printing of Notes at
Mysore on June 1 and at Salboni on December 11.
||The Office of the Banking
Ombudsman established for expeditious & inexpensive resolution
of customer complaints related to Banking services.
allowed to fix their own interest rates on domestic term deposits
with maturity of two years.
||RBI Web site made
Government of India agree to replace the system of ad hoc Treasury
Bills with Ways and Means Advances ending automatic monetisation of
||RBI Conducts first auction
of 14 day Treasury Bills. In October, auction of 28 day Treasury
Bills was introduced.
Institutional Investors (debt funds) permitted to invest in dated
||Bimal Jalan appointed
of measures introduced in response to the Asian Currency Crisis.
||Fixed rate repos in G-Secs
introduced to give maneuverability in liquidity management; and to
bring orderly conditions in money and forex markets.
Index Bonds introduced for first time. Inflation hedged instrument
linked to Wholesale Price Index.
||Recommendations on the
harmonisation of the Role and Operations of Development Financial
Institutions and Banks paved the way for universal banking in India.
Monetary Museum Web Site launched.
||Interim Liquidity Adjustment
Rate Swaps (IRS) and Forward Rate Agreements (FRAs) introduced as
||RBI issued guidelines to
banks for the issuance of debit cards and smart cards to ease
pressure on physical cash.
Exchange Management Act, 1999 replaces FERA, 1973 with the objective
of �facilitating external trade and payments� and �promoting
the orderly development and maintenance of foreign exchange market
in India�. The new act became operative from June 2000 along with
a sunset clause.