RBI asks banks to disburse sanctioned limits to clients

October 13, 2008: In view of 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.

2. In view of the improved liquidity in the markets, the banks concerned are advised by RBI to review all such cases and permit drawal of sanctioned limits, guided by their usual commercial judgment.

3. RBI has also advised banks to consider restructuring the dues of the SMEs, under the guidelines issued on August 27, 2008, on merits of the case.

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