Question

"New Economic Policy 1991 altered the role of Reserve Bank of India (RBI) in the economy."

Justify the given statement with valid explanation.

Answer 1

• The Reserve Bank of India (RBI) was repositioned as a financial sector facilitator rather than a strict regulator in 1991 by the New Economic Policy.
• Financial institutions now have more freedom to decide for themselves within the parameters of the RBI's regulatory framework, thanks to this shift.
• The change was meant to promote financial system dynamism, competitiveness, and innovation in order to support stability and economic progress.