While banks have been advised to allocate a sub-limit in respect of large borrower accounts, for making payments to the MSE units against purchases from them but it is not possible for banks to force the large buyers to utilize the limit for making payments. This problem could be institutionally tackled by factoring.
First, with the Reserve Bank acting as the debt manager to the Government, a well-developed and liquid government securities market is essential to ensure the smooth passage of Government’s market borrowings to finance its deficit.