Norms for trade receivable exchange soon: Raghuram Rajan

Reserve Bank of India (RBI) Governor Raghuram Rajan on Wednesday said that the apex bank will soon come out with a set of norms for a dedicated exchange for trade receivables that can help smaller businesses tide over liquidity issues.

"The RBI has been discussing with market participants how to do this, and in a very short while, we should have the structure in place," he said, addressing the annual gathering of apex IT industry body Nasscom here.

Mr Rajan said the big businesses squeeze the smaller ones when it comes to payments, creating difficulties for the latter. Therefore, if the small business owner is able to raise money against the receivable, it will be much better for the business, he said, adding that an exchange can help bring down the cost of such transactions through automation.

Technology has a big role to play for this to happen by providing the right kind of solutions, the RBI chief said.

"Technology can also be used to facilitate credit," he said.

He further said such an arrangement will truly bring financial inclusion to the micro and small enterprises.

Meanwhile, on the key agenda of financial inclusion, Mr Rajan said the RBI has made it possible for a person not having a bank account to receive remittances through the use of ATM and simple mobile phones.