Maidavolu Narasimham (3 June 192720 April 2021) was an Indian banker who served as the thirteenth Governor of the Reserve Bank of India (RBI) from 2 May 1977 to 30 November 1977. For his contributions to the banking and financial sector in India, he is often referred to as the father of banking reforms in India. Some of the reforms attributed to his recommendations include changes to banking structures, introduction of private sector banks, creation of asset recovery funds, rural banking, changes to capital adequacy and provisioning standards, technology upgradation and modernization of public sector banks, and capital market linked banking reforms. Narasimham also served as India's executive director at the

World Bank The World Bank is an international financial institution that provides loans and Grant (money), grants to the governments of Least developed countries, low- and Developing country, middle-income countries for the purposes of economic development ...

and later at the

International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 191 member countries, with headquarters in Washington, D.C. It is regarded as the global lender of las ...

and the

Asian Development Bank The Asian Development Bank (ADB) is a regional development bank to promote social and economic development in Asia. The bank is headquartered in Metro Manila, Philippines and maintains 31 field offices around the world. The bank was establishe ...

. He served as the secretary in the Ministry of Finance, and as the additional secretary of the Department of Economic Affairs as well. He was awarded India's second highest civilian honor, the Padma Vibhushan, in 2000.

Early life

Narasimham was born on 3 June 1927 in Nellore to Padmavati and Maidavolu Seshachelapati. The family hailed from Maidavolu village in

Guntur district Guntur district is one of the twenty six districts in the Coastal Andhra region of the States and union territories of India, Indian state of Andhra Pradesh. The administrative seat of the district is located at Guntur, the List of urban agglom ...

of present-day Andhra Pradesh. He completed his education from Presidency College, in Madras and went on to study at the

St John's College, Cambridge St John's College, formally the College of St John the Evangelist in the University of Cambridge, is a Colleges of the University of Cambridge, constituent college of the University of Cambridge, founded by the House of Tudor, Tudor matriarch L ...

. He was a budding cricketer and could have been on St. John's College's team with

Test Test(s), testing, or TEST may refer to: * Test (assessment), an educational assessment intended to measure the respondents' knowledge or other abilities Arts and entertainment * ''Test'' (2013 film), an American film * ''Test'' (2014 film) ...

-level players, but he was ineligible because of his

near-sightedness Myopia, also known as near-sightedness and short-sightedness, is an eye condition where light from distant objects focuses in front of, instead of on, the retina. As a result, distant objects appear blurred vision, blurry, while close objects ...

Career

Narasimham joined the

Reserve Bank of India Reserve Bank of India, abbreviated as RBI, is the central bank of the Republic of India, and regulatory body responsible for regulation of the Indian banking system and Indian rupee, Indian currency. Owned by the Ministry of Finance (India), Min ...

(RBI), India's central bank in 1950 in Bombay (present day Mumbai). He joined the bank as a research officer in its Economic Department. He later joined the government and served as additional secretary of the Department of Economic Affairs. He was the first and only Reserve Bank cadre officer to be appointed as governor of the central bank. He served as the thirteenth Governor of the Reserve Bank of India from 2 May 1977 to 30 November 1977. After his term as the RBI governor, he served as India's executive director at the

and later at the

. He was also the Vice President of the

. Narasimham also served as secretary in the Ministry of Finance between 1982 and 1983. He was awarded India's second highest civilian honor Padma Vibhushan in 2000.

Banking reforms

Narasimham was the chair of two high-powered committees on banking and financial sector reforms viz Committee on the Financial System (1991) and the Committee of Banking Sector Reforms (1998). The reforms and recommendations from these committees have become mainstays in the Indian banking and financial sector leading to Narasimham being referred to as the father of banking reforms in India.

Bank structures and mergers

Bank mergers toward creation of strong public sector mega-banks were first recommended by the Narasimham committee of 1991. India's recent merger of ten public sector banks in 2020 was building on recommendations from this committee.

Asset reconstruction

Some of the recommendations around creation of Asset Reconstruction Companies as means to securitize bad debt are built on the recommendations from his committee. His committee also introduced the notion of an asset reconstruction fund to take over bad loans. As a follow-up, six special debt recovery tribunals were set up. This served as the foundation for India's current Insolvency and Bankruptcy Code which was codified in 2016.

Rural banking

Earlier in 1976, he had also been the author of the Regional Rural Bank report which was the basis for the setup of regional rural banks in India, building on his blueprint and recommendations of having these banks maintain a local appeal while bringing the professionalism from large commercial banks.

Capital adequacy

The first committee report of 1991 introduced the notion of a capital adequacy ratio while proposing a phased reduction in mandatory bond investment and cash reserve ratios in an attempt to encourage lending. The committee also introduced rules around non-performing assets (NPA) classification and also had the

(RBI) requiring banks make provisions for bad loans.

Private banks and modernization of public sector banks

Some of the other recommendations from Narasimham included creation of new generation private sector banks including ICICI Bank, HDFC Bank, and Kotak Mahindra Bank. His recommendations also had banks raising money from the capital markets. Interest rates were also de-regulated fostering competition between banks. Amongst the other Public sector banks (PSB), the committee recommended that the government separate ownership from management and also led to technology upgradation and modernization.

Published works

* * * * *

Death

Narasimham died on 20 April 2021 in Hyderabad from

COVID-19 Coronavirus disease 2019 (COVID-19) is a contagious disease caused by the coronavirus SARS-CoV-2. In January 2020, the disease spread worldwide, resulting in the COVID-19 pandemic. The symptoms of COVID‑19 can vary but often include fever ...

complications. He was aged 94.

References

External links

Report of the Committee on the Financial System (1991)

Action Taken Report -- Committee on Banking Sector Reforms (1998)
{{DEFAULTSORT:Narasimham, M Governors of the Reserve Bank of India Indian bankers Indian civil servants Recipients of the Padma Vibhushan in trade & industry 2021 deaths 1927 births People from Guntur district Businesspeople from Andhra Pradesh Deaths from the COVID-19 pandemic in India Alumni of St John's College, Cambridge