Banks in India have been providing finance to industry and trade on the basis of security.

To ensure its equitable distribution in right channel bank credit has been a subject matter
regulation and control by government. since November 1965 a credit authorization team
has been in operations as as a part f reserve bank before sanctioning any fresh credit
limits of one crore or more to any single party or any limit that would enable the party
over one crore or more from the entire banking system on secured or unsecured basis the
limits of rupees one crore was subsequently raced to the five crores
To regulate and control bank finance the reserve bank of India has been issuing directives
and guidelines to the bank from time to time on recommends of certain specially
constituted committees enabled with the task examining various aspects of bank finance
industry we have discussed below the important finding and recommendations for
following committees
1.
2.
3.
4.
5.

Dehaja committee
Tandom committee
chore committee
Maralhe committee
kannan committee report
1) deheja committee

National credit counsel a committee under the characterizing of sree V T Dehejia in 1968
to determine the extent to which credit needs of industry and trade are likely to be
influenced and how such tend could be checked and to go in establishing some norms for
lending operations by commercial banks. The committee was an opinion that there was
alo tendency to divert short term credit for long term assets. Although committee was an
opinion that it was default to develop norms for lending to individual concerns the
committee recommended that the banks should finance industry on basis of the study of
borrowers total operations rather than security basis alone. The committee future
recommended that the total credit requirements of the borrower should be segregated to
hard core and short term components. The hard core components which should present
the minimum level of inventories which the industry requiresd to hold for maintain a
given level of production shold be put on the normal term loan basis and subject to
payment schedule
2) Tandon committee report
Reserve bank of India step up a committee under the chairman ship of Shri PL Tandon in
July 1974 the terms of reference committee were
To suggest guide line for commercial banks to follo up and supervise credit from the
point of view of ensuring poper endues
To suggest the type of operational data and other information that may be that obtained
by bank periodically from the borrowers and by the reserve bank of India from lending
banks