In July 2002, a Review Group headed by Shri G. Ramachandran, former Finance Secretary, was appointed to study the working of the LAB Scheme and make recommendations.
Based on the recommendations of the Group and with the concurrence of the Government of India, it was decided by the RBI that no new LABs would be licensed till the existing LABs were placed on a sound footing. The existing LABs were also advised by the RBI in November 2003 to attain a capital of Rs.