New Delhi: The Reserve Bank of India (RBI) must ask banks to ease credit disbursal norms and pass on the benefits of the central bank’s lower key rates to the industry, which is facing credit crunch in the wake of global downturn, an industry body Assocham said.
“Despite the RBI’s instructions to pass on benefits of reduced policy rates to borrowers, banks have still to pass on the full impact to their lenders since commercial banks keep on deferring it on one pretext or the other,” the chamber said, adding the apex bank should force commercial banks to liberalize their credit dispensation norms for borrowers.
Impacted by the economic slowdown, the requirement of industry and exporters has increased but the credit assessment mechanism of banks and more particularly private banks has not fallen in line with new realities, it added.
It, therefore added that there needs to be a more effective mechanism so that banks liberalize the credit dispensation for borrowers especially exporters.
“These challenging times will not remain for ever but timely assistance will repair the huge damage to exporter sector where large number of jobs have been lost,” it added.