A new time-domain methodology for designing FIR multirate filter banks is proposed. The conditions for perfect reconstruction systems can only be met by a limited number of systems, and consequently one of the major problems is to design analysis and synthesis filters which reduce the reconstruction error to a minimum. A recursive technique is proposed which uses the synthesis filters from one iteration to update the analysis filters for the next. The Letter shows that this is computationally simpler than previously proposed time-domain methods and produces filter banks in which the reconstruction error is reduced to practically acceptable levels.