The Reserve Bank of India working group on bills discounting has recommended that the facility should be offered to the services sector. The group, headed by R K Krishnamurthy, chairman, Vysya Bank Ltd, submitted its report yesterday.
Making bill finance available at interest rates lower than loan or cash credit, freedom to banks to set discounting rates without linkage to prime lending rate, abolition of stamp duty on bills of usance up to 182 days, and exemption from stamp duty to financial institutions and registered non-banking finance companies are among the other recommendations of the panel.
The services rendered should be considered on the same footing as that of sale of goods, the group recommended. Borrowing clients enjoying a satisfactory rating with banks and having working capital limits of Rs 10 crore and above may be allowed drawals against the working capital demand loans component.
The basis of this could be a tradable promisory note in favour of the lending bank called
