RailEnquiry

Major bond market borrowers such as Indian Railway Finance Corporation and Konkan Railway Corporation, along with banks such as Andhra Bank, Canara Bank, UCO Bank, Syndicate Bank and Central Bank of India are rushing to the Life Insurance Corporation (LIC) seeking immediate disbursal of their sanctioned credit limits.

According to official sources, the rush for loan disbursement has gone up following the fear that interest rates will go up in the near future with clubbing of government borrowing with the corporate credit in the second half of the current fiscal.

On the other hand, banks are also clinging to LIC for raising funds in the form of subordinated debt (Tier-II) following the RBI structure to limit the cross holding among banks to 10 per cent of their of their portfolio.

After the new norms, they are finding it difficult to raise money as most of the banks are well in excess of this limit and are busy shedding the flab before time.