Delivering the Rajiv Gandhi Memorial lecture at the Administrative Staff College of India here, Chidambaram said while he completely agreed with Narasimham committee recommendations, he was of the opinion that government ownership was a strong deterrent to professionalism, and entrepreneurial behaviour.

"We can debate whether the reduction should be to 33 per cent or 26 per cent, but it must go below 51 per cent," he said.

Efforts to provide greater managerial and commercial autonomy to bank managements were a failure in the absence of fundamental changes in the overall ownership framework, he pointed out. The bureaucracy and political system have developed a vested interest in maintaining the status quo, he alleged and added that promotion by seniority and resistance to campus recruitment have bred inefficiency in public sector banks.

Calling foran immediate and simultaneous opening of all segments of the insurance business, Chidambaram said foreign equity upto 49 per cent in insurance joint ventures should be allowed to bring in technology and expertise.

Each new company would be able to generate at least an additional Rs 5000 crore annually from the tenth year onwards for investment in infrastructure sectors, over and above the Rs 7000 crore presently provided by the LIC and GIC, he said.