Financial Daily from THE HINDU group of publications
Sunday, Mar 13, 2005
Industry & Economy
Govt plans to introduce rating system for SSIs
Mangalore , March 12
THE Deputy Governor of the Reserve Bank of India, Mr V. Leeladhar, has said that the Government is trying to introduce rating system for the small-scale industries.
In an interaction with the members of the Kanara Chamber of Commerce and Industries (KCCI) here, he said, "One good thing which is happening in the small-scale industries (SSI) sector is some sort of a rating system that we are trying to introduce."
Once this happens, banks can fix the lending rate to the SSIs based on their rating as in the case of commercial papers (CPs).
"We look at the credit rating of the CPs and fix the rate while investing," he said.
KCCI had stated that SSIs are now charged over the prime lending rate of 10.25 per cent to 11 per cent. It had requested the RBI that it should work with banks to have a structured approach in lending. This will ensure that the best borrower in each segment gets the lowest rate and progressively manages as per the international norms.
Outsourcing currency management: To the suggestions of the KCCI to initiate private collaboration in cash, currency, and coin management, he said there are about 4,400 currency chests in the country.
All the money in them belongs to the RBI. He said that some private banks have started outsourcing the work of sorting of currency and bundling. So far, this type of activity has not started in public sector banks.
Mr Leeladhar said he had recently witnessed a presentation where he was informed that it was possible to track the movement of currency within the chest at regional offices of the RBI.
"When things like this happen, I think, with proper safeguards, there is a possibility of outsourcing many of these works. It has to happen," he said.
Common account number: To the KCCI's plea to introduce a common account number standard, he said the Indian Banks' Association had set up a group to work out a common code across banks. The group has suggested that the account number under real time gross settlement be 24 digits. It has recommended that those banks with smaller account numbers can add up the remaining most significant digits with zeroes.
"The RBI is examining these recommendations. Maybe in a couple of weeks we will be able to come out with something on this count," he added.
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