PHDCCI urges RBI to boost MSME credit, fix LoC rules

New Delhi: Industry body PHD Chamber of Commerce and Industry has urged the Reserve Bank of India to boost credit flow to small businesses and address operational issues such as inconsistent handling of discrepancies in letter of credit (LoC) documents by issuing banks and alleged unfair practices by rating agencies.

In a statement, PHDCCI noted that its leadership met the RBI governor on Monday and requested the banking sector regulator to issue clear guidelines requiring banks to honour LoC documents where discrepancies have been formally waived by the applicant, except in cases involving fraud or material risk.

"The RBI may also prescribe uniform procedures and standardised documentation practices for discrepancy waivers, ensuring consistency across banks," said Rajeev Juneja, president of PHDCCI.