Question

Identify, which of the following statement is incorrect about the financial sector reform introduced in 1991?

Options

• Enabled the establishment of private sector banks, Indian as well as foreign.

• Foreign investment limit in banks was raised to around 74%.

• Foreign Institutional Investors were allowed to invest in Indian financial markets.

• Change in the role of the Reserve Bank of India from facilitator to regulator.

Answer 1

Change in the role of the Reserve Bank of India from facilitator to regulator.

Explanation:

The statement is incorrect because the 1991 financial sector reforms first permitted very limited foreign involvement in Indian banks, with the cap steadily rising over time but not instantly to 74%.