RBI asks banks to review working capital credit disbursement

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Mumbai, Oct 13 (UNI) In an attempt to ease credit availability to the corporate sector, the Reserve Bank of India today directed banks to review cases and permit drawal of sanctioned working capital limits, in view of the improved liquidity in the market.

In a notification here, the RBI said in view of ''some what tight'' liquidity conditions in the domestic markets in the recent past, some of the banks have been averse to disbursing working capital limits and term loans (including short-term loans) to their clients against the sanctioned limits, even in cases where the drawing power is available in the client's account and all the terms and conditions of the sanction of the loan stand complied with.

However, the RBI said that while permitting such credit drawals, banks should be guided by their usual commercial judgement.

Referring to the prudential guidelines on restructuring of advances, issued on August 27, the RBI said some banks have not been undertaking the restructuring of dues of small and medium enterprises, where warranted.

It advised the banks concerned to consider restructuring the dues of the SMEs, under the guidelines, on merits of the case.

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