The Chore Committee in a nutshell
The main observations of Chore Committee were related to mismatch of demand and
availability of Bank Credit during peak and non-peak periods of activity. The Committee
suggested that the limits should be sanctioned separately to take care of both the
situations wherever the operations were thought to be of cyclic nature. Annual review of
all limits was also suggested. With fixation of two types of limits, the need for
bifurcation of limits was not felt and this recommendation (bifurcation of limits) of
Tandon Committee was abandoned. The Committee also sought to make the Bank Credit more
disciplined by prescribing a definite treatment to requests for ad hoc limits. Second
method of lending suggested by Tandon Committee and information system was made compulsory
for working capital limits above Rs.50 lacs.
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