200 Research in Digital Revolution and New India (ISBN : 978-1-5136-2964-3) FINANCIAL INCLUSION INITIATIVES IN INDIA AND ITS CONTRIBUTION TOWARDS BANKING SECTOR REFORM Divya.U Dr.Noor Firdoos Jahan Assistant professor Professor Adarsh Institute of Management & Information Technology Marketing Department Research Scholar Mysore university RV Institute of Management Bengaluru Bengaluru ABSTRACT Banking sector plays a vital role the development of any economy. There were LPG ushered in drastic changes in Indian economy in the year 1991. At the same time Indian banking sector was plagued with many problems. To bring Reforms in the Banking sector Narasimham committee was formulated. Narasimham committee Recommendations were far-fetched and far-ahead of their times. Financial inclusion initiatives have a history of more than fifty years. Measures towards Financial inclusion in India started before the introduction of Banking Reforms. Financial inclusion initiatives like Nationalisation of banks, Self-help group model,Kissan credit cards and General credit cards, Bankmitr,Swabimaancampign,PradhanmantriJandhanyojanaetc contributed tremendously not only towards financial inclusion but also towards the banking sector reforms in India. This paper tries give a bird eye view towards the contribution of Financial inclusion measures towards Banking sector Reforms. Key words : Banking reforms, Financial inclusion, Technology, Economy, Banks. Banking sector reforms in India Banking sector is the backbone of any economy. An efficient banking sector can promote greater amount of savings and investment which can help to achieve faster economic growth of the country. In India, in the year 1991 saw a drastic change in the economic policy of government. Liberalization, privatization, globalization emerged as vital parameters of India’s growth and development. But at the same time Indian economy was facing macro-economic crisis like low economic growth Rate, high level ofnon-performing assets in banks, dissatisfaction of customerswith banking Services, unsound banking system, poor financial condition of commercial banks,low level of technology use in banks,pooraccounting standards ,capital inadequacy etc. So government of India appointed a high level committee headed by Shri M. Narsimham, a former(13 th ) governor of the Reserve bank of India on August 14 1991 to look into all aspects of the financial system in India to frame comprehensive recommendations for financial sector reforms including the banking sector and capital markets. The committee submitted two reports. 1) Narsimham committee I on financial sector reform in 1991. 2) Narsimham committee II on banking sector reform in 1998. Recommendation of Narsimham committee on Banking sector Reform in 1991 i) Reduction in CRR and SLR: - The Narsimham committee had recommended the reduction in CRR and SLR with a view to increase credit creation capacity of banks. It recommended SLR to be reduced to 25% from 37.5% andCRR should be curtailed from 15% to 5.5% in various phases. ii) Abolition of directed credit programs: – Narsimham committee recommended more autonomy for banks for lending and abolition of directed credit program gradually. They recommended re-examination of the present relevance of Directed credit programs, especially for those sectors which had become self-sufficient. It also called for a re-defining of the priority sector. iii) Deregulation and lowering interest rate: – The Committee observed that the prevailing structure of administered rates was highly complex and rigid and called for deregulating it so that it reflects the emerging market conditions. The Committee also recommended phasing out Concessional Interest rates. iv) Adaption of uniform accounting practices: – Narsimham committee recommended uniformity in maintaining accounts, complete transparency regarding bank Balance sheets and making full disclosures. v) Establishment of special tribunal (Asset reconstruction fund):- Those days, the proportion of bad debts and non- performing assets of the public sector banks and Development financial institutes were very high. The