The Reserve Bank of India has decided to set up a working group to formulate modalities for extending credit to software industry.
This was announced at a meeting the deputy governor of the bank, S P Talwar, had with chairmen of a clutch of banks here on Saturday.
Talwar clarified at the meeting, which was called to discuss the prevailing situation in the credit dispensation by banks to commercial sector, that the recent measures of the central bank affecting the forex market were temporary and should not come in the way of flow of credit.
Talwar also exhorted bankers to give a thrust to the financing of trade and commerce, which require more financial support from banks, and monitor the credit growth on a monthly basis. The bankers were advised to convene meetings of regional and zonal heads and visit the branches to monitor the situation.
According to the chairman of a nationalised bank, who was present at the meeting, the deputy governor asked them to be more cautious while rejecting a credit proposal. Rejection should be done at higher levels, not at the branch level, he said.
Expressing concern at the credit offtake during the current financial year, Talwar said that non-food bank credit had increased by merely Rs 3660 crore up to November 21. But if banks' investment in commercial paper, debentures, shares and bonds of the corporate sector are taken into account, the increase in flow of bank funds to the corporate sector works out to Rs 14384 crore, compared with Rs 5651 crore last year.
Bankers , in turn, pointed out that their additional credit sanctions were already showing an improvement. Upto November 21, the additional credit sanctions were Rs 24,680 crore as against Rs 13,001 crore during the corresponding period last year. Credit growth in the coming months will be quite encouraging, they felt.
