Question:
New Economic Policy 1991 altered the role of Reserve Bank of India (RBI) in the economy.
New Economic Policy 1991 altered the role of Reserve Bank of India (RBI) in the economy.
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The LPG (1991) brought major liberalization reforms that impacted the role of the RBI.
Updated On: Feb 1, 2025
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Solution and Explanation
Defend: The New Economic Policy (1991) brought significant liberalization reforms that impacted the role of the RBI:
Deregulation of Financial Sector: RBI shifted from controlling credit to regulating it, emphasizing monetary policy formulation over direct intervention in lending activities.
Banking Sector Reforms: RBI played a key role in introducing prudential norms and supervising financial institutions to enhance efficiency and transparency.
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