PARLIAMENT-Creeping Atrophy

terms of cheaper funds and inducement will be provided for corporate units to improve their 'behaviour' by honouring financial commitments like repayment of loans, payment of interest, etc, in time and to show better financial results. At least in the initial stages the scheme would cover only large borrowers (CAS parties). But the real snag is that the commercial paper would be absorbed only by the organised banking and financial sector and the entry of 'borrowers' as well as 'lenders' would be controlled by the Reserve Bank. In essence, thus, the commercial paper market is likely to merely bring about changes in the 'form' of borrowing rather than its 'content'. If the real objective is to reward good behaviour, even the present CAS arrangement is capable of incorporating such a reform.