New Delhi, June 22: PHDCCI today asked banks to introduce a transparent system of credit rating and inform the low-rated borrowing units about the areas they were lagging and counsel them to perform better. "Banks should adopt a flexible system of charging interest on the basis of credit rating, depending on the type of industry, working of a particular unit and other factors which have happened during the year," the chamber said in a statement.
At present, the commercial banks keep credit rating of borrowers secret and charge higher rate of interest, as high as three per cent over the normal lending rate, from low-rated units.
The chamber said in case of borrowers who do not commit any default in repayment of term loan and interest, banks should lend at only prime lending rate and the maximum internet rate in such cases be fixed at only one per cent above PLR.
Banks should encourage profit making units by reducing interest rate and by giving pre-payment incentives.
Corporate which have obtained high cost term loan from banks should be allowed to retire such borrowings with minimum charges as the process would reduce the burden of interest on industry, increase liquidity of banks and reduce NPAs.

Bureau Report