 "RBI")
The Reserve Bank of India (RBI) has disallowed the use of Letters of Comfort (LoC), which may impact loans worth Rs 35,000 crore. Sixty per cent of these belong to power, healthcare, engineering & construction, and road sectors, a Times of India report stated.
What is a Letter of Comfort (LoC)?
LoC is a letter issued by a parent company which tells a bank that they know the loan is availed by one of their subsidiaries. The letter states that the parent company "supports" the subsidiary in the process, and they will lend their hand wherever required.
It is
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