Rhea Manchanda, Pravin Gandhi College of Law, Mumbai University
The finance sector has been one of the key participants in India's efforts to be successful in advancing its economic development. Developments in the financial sector and in corporate behaviour trailed behind changes in the legal framework controlling commercial transactions. It decreased the pace at which defaulted loans were recovered and raised the quantity of nonperforming assets retained by banks and other financial institutions.
The Central Government established the Andhyarujina Committee, the Narasimham Committee I and II, and the Narasimham Committee III to examine banking sector reforms and assess the necessity for legal system improvements in these sectors. The adoption of new legislation for securitization that would enable banks and financial institutions to purchase securities and sell them without requiring the involvement of a court was suggested by these committees to the other committees.
