"Some clubs have dress code and they give membership mostly to foreigners or those who have black money and follow foreign culture," the panel, set up last year, said in its interim report submitted to the assembly here Friday.
The panel members, headed by Bharatiya Janata Party legislator Hemachandra Sagar, visited Bangalore Golf Club, Century Club, Karnataka State Cricket Association, Bangalore Turf Club, Bowring Institute Club and Bangalore Club -- all popular clubs in Bangalore.
The panel studied information furnished by the revenue department on 22 other clubs in Bangalore.
The panel said: "No club in the state should have dress code and the government should direct them to allow entry to ordinary citizens wearing decent clothes."
It also wanted these clubs to give membership to members of parliament, assembly and legislative council.
It recommended setting up of a government panel to oversee the functioning of the clubs.
The clubs should also be made to give membership to winners of national and state awards, top sports personalities, ex-servicemen and leaders who have worked for social development.
The panel was set up when the then leader of the opposition Siddaramaiah, who is now chief minister, and several other members had raised the issue of dress code and alleged irregularities in many clubs in the state.