By opening and expanding these facilities, we are trying to assure banks, dealers, and commercial paper issuers that they can extend credit without worrying about whether they will be able to borrow to fund those loans. We are also trying to assure those who lend to these firms that the borrowers will have a source of funding to pay them back.
Third, during this phase, foreign banks may be permitted to enter into merger and acquisition transactions with any private sector bank in India, subject to the overall investment limit of 74 per cent. In recent years, comprehensive credit information, which provides details pertaining to credit facilities already availed of by a borrower as well as his payment track record, has become critical.