RBI aims to enhance credit discipline with new guidelines for large borrowers
- Country:
- India
The Reserve Bank Wednesday came out with guidelines for enhancing credit discipline among large borrowers.
In respect of borrowers having aggregate fund based working capital limit of Rs 150 crore and above, a minimum level of 'loan component' of 40 per cent will be effective from April 1, 2019, said the guidelines.
"Accordingly, for such borrowers, the outstanding 'loan component' (working capital loan) must be equal to at least 40 per cent of the sanctioned fund-based working capital limit...," it said.
Drawings in excess of the minimum loan component threshold may be allowed in the form of cash credit facility, the RBI added.
The guidelines further said the amount and tenor of the loan component may be fixed by banks in consultation with the borrowers, subject to the tenor being not less than seven days.
The guidelines, the RBI said, will be effective from April 1, 2019, covering both existing as well as new relationships.
The 40 per cent loan component will be revised to 60 per cent, with effect from July 1, 2019.
(With inputs from agencies.)
ALSO READ
PM Modi launches PM-SURAJ portal, sanctions credit support to one lakh entrepreneurs
Digital competition bill proposes various obligations for large digital players
PM Modi sanctions credit support to 1 lakh entrepreneurs of disadvantaged sections
Giant Sequoias, world's largest trees, thriving in UK, report shows
Rs 1,914 crore sanctioned for beneficiaries under credit outreach plan in Sambhajinagar