The ICMF delegation led by its chairman Deepak Parikh, met AT Pannir Selvam, chairman of IBA to discuss several issues such as reducing credit margins to 10-15 per cent, liberalising bill discounting scheme, making lending norms uniform under consortium credit, advances against payment of bonus and voluntary retirement schemes. The ICMF strongly urged for an interest rate of PLR plus one per cent instead of the usual 17-18 per cent charged by commercial banks.

The delegation also highlighted that cotton being a seasonal commodity, bank credit should be made available for holding cotton for a period longer than two-three months' consumption. Also the rate of interest against such advances should be during the peak period and slightlyhigher during the slack period.

In view of mills' inability to repay term loans because of continued cash losses, such loans should be rescheduled. The IBA was requested to consider moratorium of two-three years on servicing term loans.