RBI's draft guidelines on loan system for delivery of bank credit will help improve liquidity planning by large borrowers and intra-day fund management by lenders, a SBI study said on Monday.Earlier this month, Reserve Bank of India had came out with draft guidelines on loan system for delivery of bank credit to improve discipline among larger borrowers enjoying working capital facility from the banking system.The draft stipulates a minimum level of 'loan component' in fund based working capital finance and a mandatory Credit Conversion Factor (CCF) for the undrawn portion of cash credit/ overdraft limits availed by large borrowers."The proposed new norm is a positive for all," said SBI in its research report 'Ecowrap'.Independent estimates suggest that the cash-to-cash cycle for Indian corporates as also how long cash is tied up to working capital are comparatively larger as compared to their global counterparts, it said.There are many benefits of this move, the report said, adding that as the borrowers would be required to manage their working capital cycle and manage short term liquidity, "it would lead to better liquidity planning by borrowers"

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