New Delhi, March 17 -- Industry body PHD Chamber of Commerce and Industry (PHDCCI) has urged the Reserve Bank of India (RBI) to enhance credit access for small businesses and address operational challenges in trade finance, including inconsistencies in handling Letters of Credit (LoC).
In a meeting with RBI Governor Sanjay Malhotra on March 16, the industry body flagged inconsistent treatment of discrepancies in LoC documents by issuing banks.
PHDCCI President Rajeev Juneja said, Banks sometimes refuse payment even when discrepancies are minor and have been formally waived by the LC applicant. This undermines the reliability of Letters of Credit as payment instruments. Arbitrary use of discretion by banks in accepting or rejecting discr...