Banks told to look for loans not guaranteed before giving credit
The Reserve Bank of India is planning to ask companies to declare unhedged positions while raising foreign debt. RBI has also asked banks to check the portion of loans that are not guaranteed while examining the creditworthiness of a company before sanctioning a loan. RBI Deputy Governor Shyamala Gopinath told Financial Chronicle on her last day in office that the central bank would closely monitor overseas exposures of companies by asking them to declare unhedged positions while going for external commercial borrowing (ECB). The central bank has also set up a committee headed by former deputy governor Usha Thorat to track the audit trail of bank credit. Ananth Narayan, managing director and regional head of fixed income and currency trading in South Asia at Standard Chartered Bank, said the risk the company runs depends on overall borrowing and not just one loan alone. “However, it is important for the regulator to make a distinction between these two kinds of NBFCs and support the NBFCs that support financial inclusion in rural areas,” said Gopinath.
http://www.mydigitalfc.com/news/rbi-may-demand-data-unhedged-positions-firms-170
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