RBI set up a high-level committee on April 30,1992 under the Chairmanship of Mr. R. Jankiraman. The committee submitted the fifth and final report on May 7, 1993. The committee identified several types of irregularities in securities transactions which were used to siphon off funds out of the banking system.
- Purchases of securities and other instruments were made by banks was ostensibly another bank but when in reality the proceeds were of brokers.
- Ready forward ( Sale and purchase) transactions were entered into either on their own or on client's accounts by banks with brokers who used these funds for speculative activity.
- Brokers in the stock exchanges were directly financed by banks by discounting bills not supported by genuine transactions.
- Baks and other institutions showed large payments as call money to other banks. However, in the books of the receiving banks, there was no record of call money acceptances. Instead, the amounts were credited to the accounts of individuals brokers. On the due date, these alleged call loans were accounts in the name of other banks.
- Banks and other institutions rediscounted bills of exchange held by other banks and institutions but the proceeds and repayments were routed through brokers accounts.
- Sums received as inter-corporate deposits and under portfolio management schemes (PMS) by merchant banking subsidiaries of the public sector and other banks were passed on to brokers through ready forward deals.
Read: Banking and Financial Committees in India
