Narasimham Committee, 1991

Reputed banks may enhance capital through public issues.

No bar on new private sector banks.

Liberal policy towards foreign banks.

Four-tier banking structure.

Abolition of dual control.

Depoliticisation of chief executives appointments.

 Lower statutory liquidity ratio (SLR) to 25 percent.

Phasing out of concessional interest rates.

New system for provision of debts.

Special tribunals for recovery of dues.

Scrapping of branch licensing.

No further nationalization of banks.

RBI should be more liberal in allowing foreign banks to open branches

Gupta Committee, 1998

Commercial banks should be free to fix the interest rates for

agricultural loans of all amounts, as is being done by cooperative banks and RRBs. Banks should prepare special agricultural credit plans to accelerate the flow and improve the quality of lending. 90 per cent of all loan applications should be decided at the branch level to ensure timely loans.

State governments should constitute separate teams for

improving loan recovery, and through rurally oriented field

publicity campaigns, inform borrowers to return loans and

 Substantial modification in service Area Approach so as to

provide borrowers a choice of banks and bankers, a wide area of operations.

Improved accounting systems for disaggregated recovery data

as per loan products/time to enable managers to determine product viability. While timeliness and adequacy of credit are critical in increasing the credit flow to agriculture, the responsibility of a

particular branch for the credit requirements for a particular

village should, however, continue.

 State

governments should abolish stamp duty on mortgage

of agricultural land for obtaining loans from banks in view of high duty costs and procedural difficulties.

Lending to the farm sector should be on the basis of

confidence in the borrowers and the appraisal forms should shift from project-based considerations to a holistic assessment of the borrowers income. The focus of credit appraisal should be on evaluation of income of the borrower

and a comprehensive assessment of credit needs taking into

account track record, credibility, capability and technical viability of the project.

 Appropriate incentive systems, including interest benefit or

rebate to borrowers, for prompt repayment of dues. Farmers opting for savings module may get fixed rates on both deposits

and advances linked to the loan product.

Disbursing agricultural loans in cash and kind restricts borrowers choice and has given rise to false bills and receipts. Obtaining a no-due certificate should be left to the discretion of the leading bankers.