Which of the following elements was NOT part of the Financial Sector Reforms under the Liberalisation Model?

Correct option is D

The correct answer is (d) RBI’s role was enhanced to gain control over banks.

• Under the Liberalisation Model, financial sector reforms included the permission to set up private banks, the investment limit in foreign banks was increased to 74%, and the setting up of new branches without RBI approval. However, the RBI’s role was not enhanced to gain direct control over banks; instead, the reforms focused on liberalisation, market-based reforms, and promoting competition.
Information Booster 
• The Liberalisation Model emphasized reducing the direct control of the RBI over routine banking activities, rather than enhancing its control.
• The investment limit for foreign banks was raised to 74% to encourage foreign participation and capital inflows.