RBI Releases Draft Guidelines on Loan System for Delivery of Bank Credit
Banks provide working capital finance by way of cash credit/overdraft, working capital demand loan, purchase/discount of bills, bank guarantee, letter of credit, factoring, etc. Cash credit (“CC”) is by far the most popular mode of working capital financing. While CC has its benefits, it also poses several regulatory challenges such as perpetual roll overs, transmission of liquidity management from the borrowers to banks/RBI, hampering of smooth transmission of monetary policy, etc.
To this end, the Reserve Bank of India (“RBI”) released draft guidelines on June 12, 2018 regarding a loan system for delivery of bank credit which stipulate a minimum level of ‘loan component’ in fund based working capital finance and a mandatory credit conversion factor for the undrawn portion of cash credit / overdraft limits availed by large borrowers, with a view to enhancing credit discipline among large borrowers.
Government to Discuss Womens’ Safety With Popular Cab Aggregators
In light of the increasing number of crimes committed against women by cab drivers, the women and child development ministry (“WCD”) has reportedly planned a meeting with cab aggregators Ola and Uber to address these issues. The meeting would be chaired by WCD Union Minister Maneka Gandhi and attended by other ministries and representatives from Ola and Uber. WCD is seeking greater accountability from the cab aggregators, who tend to simply wash their hands off the matter by dismissing the accused drivers from their employment. WCD also wants thorough background checks of the drivers and the aggregators to ensure that the taxis disable the child-lock feature in the vehicles that ply for them.