📚 JAIIB 2025 • IE & IFS • Module C • Chapter 9 of 9

Banking Reforms & Developments

Post-2010 banking transformation — PMJDY (Jan Dhan), JAM Trinity, differentiated banks, PJ Nayak Committee, EASE reforms, PSB consolidation (27→12), IBC for NPA resolution, NaBFID, NARCL (Bad Bank), UPI revolution, deposit insurance ₹5 lakh.

⏱ 16 min read🎯 High Exam Weightage🧠 8 Memory Tricks⚡ 12 Flash Cards

Banky Witnesses the Banking Revolution! 🚀

Indian banking has transformed dramatically in the last decade — from Jan Dhan to UPI to Bad Bank to PSB mergers. This final Module C chapter captures every major reform that’s reshaping YOUR banking career.

“Sir, my branch went from 5,000 accounts to 50,000 because of Jan Dhan! And now UPI has changed everything. What a decade!” 🚀

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Section 1 of 9

Why Read This Chapter?

These reforms are YOUR daily reality — every single one affects your branch

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Sir, I’ve lived through these reforms. Why study them formally?

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Banky, because the EXAM tests them! PMJDY opened 50 crore+ accounts. JAM Trinity (Jan Dhan + Aadhaar + Mobile) revolutionised DBT. Nachiket Mor Committee recommended SFBs and Payment Banks. PJ Nayak Committee reviewed bank board governance. EASE benchmarks PSB performance. IBC changed NPA resolution forever. PSB consolidation went from 27 to 12. NARCL (Bad Bank) takes over ₹2 lakh crore NPAs. And UPI made India a global payments leader. Knowing the WHO, WHAT, WHEN of each reform = guaranteed exam marks!

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Exam Marks

4-6 questions — PMJDY, JAM Trinity, Nachiket Mor (SFBs/Payment Banks), PJ Nayak (governance), EASE, IBC, NARCL, deposit insurance ₹5L. Very high weightage!

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Career Growth

These reforms shape your bank’s strategy for the next decade — understanding them = understanding your career trajectory

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Real Life

You’ll understand why your bank merged, why UPI is free, and why Jan Dhan accounts exist

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Section 2 of 9

How Will It Benefit You?

Real career advantages

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Give me a real scenario!

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🚀 Scenario: In a training session, the faculty asks: ‘Which committee recommended differentiated banks?’ You answer: ‘Nachiket Mor Committee (2013, set up by RBI) recommended Payment Banks and Small Finance Banks for comprehensive financial services for small businesses and low-income households.’ Faculty: ‘Perfect!’ 🌟

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Section 3 of 9

What Is This Chapter About?

30-second summary

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Quick version, sir!

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This chapter covers ALL major post-2010 reforms: PMJDY — financial inclusion (Jan Dhan accounts, ₹10K OD, RuPay card, insurance). JAM Trinity — Jan Dhan + Aadhaar + Mobile for DBT. Nachiket Mor Committee (2013) — recommended SFBs + Payment Banks. PJ Nayak Committee (2014) — bank board governance review. EASE agenda — PSB performance benchmarking. PSB Consolidation — 27 → 12. IBC — Insolvency and Bankruptcy Code for NPA resolution via NCLT. NaBFID (2021) — apex DFI for infrastructure. NARCL (Bad Bank) — takes NPAs from banks for recovery. Cooperative banks under RBI (BR Act amendment). Deposit insurance ₹1L → ₹5L. UPI + NEFT/RTGS 24×7. FDI insurance 49% → 74%. LIC IPO.

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Section 4 of 9

Key Definitions — Banky Asks, Mentor Explains

Every term explained like you’re 10

Critical Term

PMJDY — Jan Dhan Yojana

India’s biggest financial inclusion scheme — bank account for every household

50 Cr+ accounts

Banky’s Understanding: Pradhan Mantri Jan Dhan Yojana — launched to ensure every household has a bank account. Features: zero balance account, RuPay debit card, ₹10,000 overdraft facility, accident insurance (₹2 lakh), life insurance (₹30,000). Opened 50 crore+ accounts. Combined with JAM Trinity (Jan Dhan + Aadhaar + Mobile) for Direct Benefit Transfer (DBT), eliminating middlemen in subsidy distribution.

🧒 Analogy: Like giving every Indian family a ‘financial address’ — just as Aadhaar is an identity address, Jan Dhan is a banking address!

Critical Term

Nachiket Mor Committee

Recommended Payment Banks and Small Finance Banks — set up by RBI in 2013

SFBs + PBs

Banky’s Understanding: Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households — set up by RBI in September 2013, chaired by Nachiket Mor. Directly resulted in licensing of Payment Banks (deposits up to ₹2 lakh, no lending) and Small Finance Banks (full banking, 75% PSL). These ‘differentiated banks’ were designed to serve specific underserved segments.

🧒 Analogy: Like recommending specialist clinics (SFBs) and first-aid centres (Payment Banks) in addition to full hospitals (commercial banks) — serving those who can’t access the big hospital!

Critical Term

PJ Nayak Committee

Reviewed governance of bank boards — recommended reforms for PSB boards

2014 governance

Banky’s Understanding: Officially: Committee to Review Governance of Boards of Banks in India — set up by RBI in 2014. Chaired by P.J. Nayak (former Chairman, Axis Bank). Examined: board standards, strategy, governance, risk management, RBI guidelines on govt ownership, conflict of interest, fit & proper criteria for directors, board compensation.

🧒 Analogy: Like a school inspection committee checking if the management committee (bank board) is running the school (bank) properly!

Critical Term

EASE Agenda

Performance benchmarking framework for Public Sector Banks

PSB reforms

Banky’s Understanding: Enhanced Access Service Excellence — a reform agenda for calibrating PSB performance and fostering healthy competition among public sector banks. Covers: technology adoption, governance, responsible banking, NPA resolution, customer service. Each PSB is scored and ranked on EASE parameters. Designed to make PSBs competitive with private banks.

🧒 Analogy: Like a report card for PSBs — EASE scores each bank on technology, governance, customer service, and NPA management. Top scorers get bragging rights!

Critical Term

PSB Consolidation

Merged 27 public sector banks into 12 — bigger banks for bigger economy

27 → 12

Banky’s Understanding: Government consolidated PSBs through mega-mergers: from 27 PSBs down to 12. Goal: create fewer but larger, stronger banks that can compete globally. SBI absorbed its associates earlier. Then: BoB absorbed Vijaya + Dena; PNB absorbed OBC + United; Canara absorbed Syndicate; Union absorbed Andhra + Corporation; Indian Bank absorbed Allahabad.

🧒 Analogy: Like combining 27 small shops into 12 supermarkets — bigger scale, better efficiency, stronger competition!

Critical Term

IBC — Insolvency and Bankruptcy Code

New law for resolving NPAs quickly through NCLT — time-bound process

NPA resolution

Banky’s Understanding: Insolvency and Bankruptcy Code — operationalised for speedy resolution of stressed assets. When a company can’t pay debts, IBC provides a time-bound process through NCLT (National Company Law Tribunal). Goal: preserve and protect economic wealth rather than letting NPAs rot on bank books. Resolution plans must be approved by 66% of creditors. If no resolution → liquidation.

🧒 Analogy: Like a fast-track court for bankrupt companies — instead of cases dragging for decades, IBC resolves them in months, saving whatever value is left!

Critical Term

NARCL — Bad Bank

Takes over bad loans from banks for recovery — ₹2 lakh crore initially

Bad Bank

Banky’s Understanding: National Asset Reconstruction Company Limited (NARCL) — also called the ‘Bad Bank.’ Takes over impaired assets (NPAs) from commercial banks for recovery. Initially handles about ₹2 lakh crore of bad loans. Separates bad loans from good banks — allowing banks to focus on fresh lending. Govt provides backing through guarantees.

🧒 Analogy: Like a hospital’s ICU — critically ill patients (NPAs) are moved to a separate ward (NARCL) so the main hospital (bank) can focus on treating new patients!

Critical Term

UPI & Payment Revolution

Unified Payments Interface — instant, 24/7, zero cost payments via phone

India’s pride

Banky’s Understanding: UPI (Unified Payments Interface) transformed India’s payment landscape. Also: NEFT and RTGS made 24×7 (round the clock). India processes billions of UPI transactions monthly — one of the world’s most advanced payment systems. Deposit insurance: ₹1 lakh → ₹5 lakh per customer per bank. Cooperative banks brought under RBI supervision through BR Act amendment. FDI in insurance: 49% → 74%. LIC IPO launched.

🧒 Analogy: UPI is India’s gift to the world of payments — like inventing the wheel for digital money transfers. Instant, free, from your phone!

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Section 5 of 9

Chapter Explained in Simple Stories

So easy even Banky’s nephew understands

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Sir, explain this like a story!

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Three bite-sized stories coming up — impossible to forget! 🚀

🏗️ Block 1: Financial Inclusion — PMJDY & JAM

The biggest financial inclusion push in history:

🏦 PMJDY: Bank account for every household. Zero balance. RuPay card. ₹10K OD. ₹2 lakh accident insurance. ₹30K life cover. Result: 50 crore+ accounts opened!

📱 JAM Trinity: Jan Dhan (bank account) + Aadhaar (identity) + Mobile (connectivity) = Direct Benefit Transfer. Subsidies go straight to beneficiary’s account — no middlemen, no leakage. Saved the government thousands of crores in subsidy leakage.

Differentiated Banks (Nachiket Mor, 2013): Payment Banks (₹2L cap, no lending) and SFBs (full banking, 75% PSL) — designed for the last-mile customer.

Key Term

JAM Trinity

Jan Dhan (bank account) + Aadhaar (biometric ID) + Mobile (phone connectivity) = JAM. This trinity enables Direct Benefit Transfer — subsidies sent directly to bank accounts via Aadhaar-linked mobile.

🧑‍💼 Banky: “PMJDY opened 50 crore accounts, JAM eliminated middlemen, and Nachiket Mor gave us SFBs + Payment Banks? Decade of transformation! 🚀”

🏛️ Block 2: Governance & Consolidation Reforms

PJ Nayak Committee (2014): Reviewed bank board governance — board standards, risk management, director qualifications, compensation. Made PSB boards more accountable.

EASE Agenda: Enhanced Access Service Excellence — performance scorecards for PSBs. Covers technology, governance, responsible banking, NPAs, customer service. Creates healthy competition among 12 PSBs.

PSB Consolidation: Merged 27 PSBs into 12 through mega-mergers. Bigger banks = bigger balance sheets = global competitiveness. SBI absorbed associates. BoB got Vijaya+Dena. PNB got OBC+United. Canara got Syndicate. Indian Bank got Allahabad.

Key Term

27 → 12

PSB consolidation reduced public sector banks from 27 to 12 through strategic mergers. Goal: create fewer but stronger, globally competitive banks with larger balance sheets.

🧑‍💼 Banky: “PJ Nayak fixed governance, EASE created report cards, and 27 banks became 12? PSBs are being turbocharged! 🏛️”

💰 Block 3: NPA Resolution & Digital Revolution

IBC (Insolvency & Bankruptcy Code): Time-bound NPA resolution through NCLT. If company can’t pay → resolution plan (66% creditor approval) or liquidation. Saves economic value. Game-changer for NPA management.

NARCL (Bad Bank): Takes over ₹2 lakh crore NPAs from banks. Banks cleaned up → focus on fresh lending. Govt-backed.

NaBFID (2021): 5th AIFI — ₹1 lakh crore capital for infrastructure financing.

Digital revolution: UPI (instant payments), NEFT/RTGS 24×7, Cooperative banks under RBI, Deposit insurance ₹1L→₹5L, FDI insurance 49%→74%, LIC IPO.

🎉 MODULE C COMPLETE! 9 chapters covering India’s entire financial architecture — from system overview to banking reforms!

Key Term

NARCL = Bad Bank

National Asset Reconstruction Company Limited (NARCL) — takes NPAs from banks for recovery. Called ‘Bad Bank’ because it handles BAD loans. Banks become GOOD (clean books) after transferring NPAs.

🧑‍💼 Banky: “IBC for quick NPA resolution, NARCL as Bad Bank, UPI as payment revolution, deposit insurance ₹5L — MODULE C DONE! 🎉🏆”

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Section 6 of 9

Exam Angle — Every Testable Point

All facts, numbers, definitions JAIIB tests

✅ Must-Know Facts — Highest Probability

PMJDY: bank account for every household — zero balance, RuPay, ₹10K OD, ₹2L accident ins, ₹30K life
JAM Trinity: Jan Dhan + Aadhaar + Mobile = Direct Benefit Transfer (eliminates middlemen)
Nachiket Mor Committee (Sept 2013, RBI): recommended Payment Banks + Small Finance Banks
PJ Nayak Committee (2014, RBI): reviewed governance of bank boards — Axis Bank ex-chairman
EASE: Enhanced Access Service Excellence — PSB performance benchmarking
PSB Consolidation: 27 → 12 public sector banks through mega-mergers
IBC: Insolvency and Bankruptcy Code — time-bound NPA resolution via NCLT
IBC resolution: 66% creditor approval needed | If no resolution → liquidation
NARCL (Bad Bank): takes over ~₹2 lakh crore NPAs from banks for recovery — govt backed
NaBFID (2021): 5th AIFI — ₹1 lakh crore capital — infrastructure financing
Cooperative banks brought under RBI supervision — BR Act amendment
Deposit insurance: ₹1 lakh → ₹5 lakh per customer per bank (DICGC)
UPI: Unified Payments Interface — instant, 24/7, zero cost — India’s global payments leadership
NEFT and RTGS: made 24×7 (round the clock)
FDI in insurance: 49% → 74% (Budget 2021-22) | LIC IPO launched

📝 Previous Year Questions

Q: Nachiket Mor Committee recommended:

A: Payment Banks + Small Finance Banks ✅ (differentiated banks for financial inclusion)

Q: PSB consolidation reduced banks from:

A: 27 to 12 ✅

Q: NARCL is also known as:

A: Bad Bank ✅

Q: Deposit insurance increased to:

A: ₹5 lakh ✅ (from ₹1 lakh)

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Section 7 of 9

Memory Tricks That STICK

Lock every fact permanently

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Too many facts! Help! 🤯

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These tricks will lock everything in forever! 🧲

🧠 Trick 1 — JAM Trinity

Jan Dhan + Aadhaar + Mobile

J-A-M = Jan dhan, Aadhaar, Mobile JAM = spreads financial inclusion like JAM on bread! 🍞

JAM Trinity enables DBT — subsidies go directly to Jan Dhan accounts via Aadhaar-linked mobile. No middlemen = no leakage. JAM spreads financial inclusion everywhere!

🧠 Trick 2 — Nachiket Mor

2013 — SFBs + Payment Banks

Nachiket MOR = gave us MORE banks! SFBs (full but small) + Payment Banks (deposits only)

Nachiket Mor (2013, RBI) = MORE types of banks. His committee directly led to Payment Banks and SFBs being licensed. MOR = MORE banks for more people!

🧠 Trick 3 — PJ Nayak

2014 — Bank board governance

PJ NAYAK = Previously at (Axis) Judged bank boards in 2014 Governance guru!

PJ Nayak (ex-Chairman, Axis Bank) chaired the committee in 2014 to review PSB board governance. N for Nayak = N for Governance (No? Well, it reviews governance!).

🧠 Trick 4 — 27 → 12

PSB consolidation

27 became 12 = 15 merged away! 27 – 15 = 12 PSBs remain (Bigger, Fewer, Stronger!)

27 PSBs consolidated to 12 through mega-mergers. 15 banks absorbed into larger ones. Goal: global competitiveness. SBI is the largest. Result: bigger balance sheets, better efficiency.

🧠 Trick 5 — IBC + NCLT

Time-bound NPA resolution

IBC = Insolvency & Bankruptcy CODE NCLT = National Company Law TRIBUNAL 66% = creditor approval needed

IBC provides time-bound NPA resolution through NCLT. 66% of creditors must approve resolution plan. If no plan → liquidation. Preserves economic value.

🧠 Trick 6 — NARCL = Bad Bank

Takes over NPAs for recovery

NARCL = National Asset Reconstruction = ‘BAD Bank’ (handles BAD loans!) ~₹2 lakh crore initially

NARCL takes bad loans (NPAs) from banks → banks get clean books → focus on new lending. Like moving ICU patients to a separate hospital.

🧠 Trick 7 — EASE Full Form

Enhanced Access Service Excellence

EASE = report card for PSBs E = Enhanced, A = Access S = Service, E = Excellence

EASE benchmarks PSB performance on technology, governance, NPA resolution, customer service. Each PSB gets a score and rank. Creates competition among PSBs.

🧠 Trick 8 — Deposit Insurance ₹5L

From ₹1 lakh to ₹5 lakh

OLD = ₹1 lakh (one finger) NEW = ₹5 lakh (full hand!) 5× increase by DICGC!

DICGC increased deposit insurance from ₹1 lakh to ₹5 lakh per depositor per bank. 5× more protection! Combined with cooperative banks under RBI = safer banking for all.

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Section 8 of 9

Visual Summary — Chapter Map

Entire chapter in one diagram

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Section 9 of 9

Flash Revision — Last-Minute Cards

Read these 10 minutes before exam

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EXAM IN 15 MINUTES! 😰

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12 cards — read twice, you’ll get every question right! 💪

PMJDY

Bank account for every household — 50 Cr+

Zero balance, RuPay, ₹10K OD, ₹2L accident ins

JAM Trinity

Jan Dhan + Aadhaar + Mobile = DBT

Direct Benefit Transfer — eliminates middlemen

Nachiket Mor

2013 (RBI) — SFBs + Payment Banks

Differentiated banks for financial inclusion

PJ Nayak

2014 (RBI) — Bank board governance

Ex-Axis Bank Chairman | Board standards review

EASE

Enhanced Access Service Excellence

PSB performance benchmarking/scorecards

PSB Consolidation

27 → 12 through mega-mergers

Bigger, fewer, stronger banks

IBC

Insolvency & Bankruptcy Code — NPA resolution

NCLT | 66% creditor approval | Time-bound

NARCL

Bad Bank — takes ₹2L Cr NPAs from banks

Banks get clean books → focus on fresh lending

NaBFID

2021 — 5th AIFI — ₹1L Cr capital

Infrastructure financing | Centre ≥26%

Deposit Insurance

₹1 lakh → ₹5 lakh (DICGC)

5× increase | Per depositor per bank

UPI + 24×7

Instant payments + NEFT/RTGS round the clock

India’s global payments leadership

MODULE C COMPLETE!

9 chapters — Indian Financial Architecture

From system overview to banking reforms — all done! 🏆

⚡ Chapter 28 Complete — Reforms & Developments in the Banking Sector

PMJDY: 50Cr+ accounts | JAM: Jan Dhan+Aadhaar+Mobile = DBT
Nachiket Mor (2013): recommended SFBs + Payment Banks | PJ Nayak (2014): bank board governance
EASE: PSB performance benchmarking | PSB Consolidation: 27 → 12
IBC: time-bound NPA resolution via NCLT (66% approval) | NARCL: Bad Bank (₹2L Cr NPAs)
NaBFID (2021): 5th AIFI, ₹1L Cr | Deposit insurance: ₹1L → ₹5L
UPI + NEFT/RTGS 24×7 | Coops under RBI | FDI insurance 74% | LIC IPO
🏆 MODULE C COMPLETE — 9 chapters of Indian Financial Architecture done!

Banky says: “MODULE C COMPLETE! 🏆 PMJDY, JAM, IBC, NARCL, UPI, 27→12 mergers — I know every reform!” 🎉🚀

THREE modules DONE! 28 of 45 chapters complete. You’ve mastered India’s economic architecture (A), economic concepts (B), AND financial architecture (C). Module D — Financial Products & Services — awaits! 💪🔥🇮🇳

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