The Reserve Bank of India on Wednesday came out with guidelines for enhancing credit discipline among large borrowers.
In respect of borrowers having aggregate fund based working capital limit of Rs 150 crore and above, a minimum level of 'loan component' of 40% will be effective from April 1, 2019, said the guidelines.
"Accordingly, for such borrowers, the outstanding 'loan component' (working capital loan) must be equal to at least 40% of the sanctioned fund-based working capital limit...," it said.
Drawings in excess of the minimum loan component threshold may be allowed in the form of cash credit facility, the central bank added.
The guidelines further said the amount and tenor of the loan component may be fixed by banks in consultation with the borrowers, subject to the tenor being not less than seven days.
The guidelines, the central bank said, will be effective from April 1, 2019, covering both existing as well as new relationships.
The 40% loan component will be revised to 60%, with effect from July 1, 2019.