In a boost to the services sector, the Reserve Bank of India (RBI) has asked banks to exercise their commercial judgment while discounting of bills of the sector.
Further, it directed the banks not to rediscount bills earlier discounted by non-bank financial companies (NBFCs) except in respect of bills arising from sale of light commercial vehicles and two-/ three-wheelers.
The central bank, which issued fresh guidelines to banks on purchasing / discounting / negotiating / rediscounting of genuine commercial / trade bills, said while discounting services sector bills, banks should ensure that actual services are rendered and accommodation bills are not discounted. Further, providing finance against discounting of services sector bills may be treated as unsecured advance However, it added that, services sector bills should not be eligible for rediscounting.
For the purpose of credit exposure, bills purchased / discounted / negotiated under LCs or otherwise should be reckoned on the bank
