RBI’s measure on MSMEs a relief for borrowers, not lenders: Krishnan ASV, SBI Caps

As long as it does not vitiate the SME repayment culture, the measure can be welcome, Krishnan ASV, Vice-President, SBI Caps, tells ET Now.

Edited excerpts:

What do you make of the RBI relief move for MSMEs? Is it coming in a little late?

This is probably a much needed relief from the policymakers’ narrative. The MSME sector does need some help. And yet coming from the Reserve Bank of India, it seems a little hurried because as you go through the narrative and comments in the Financial Stability Report which was tabled just a day earlier, a lot of these issues are being highlighted where the RBI maintains that some of these issues need a little more investigation before some measures can be announced.


I am sure a lot of groundwork has gone into announcing this. As long as it does not vitiate the SME repayment culture, this can be welcome.

Would this make you a little more bullish and sound on PSU banks?

Difficult to answer this on one guideline but I am not sure how much of a relief this is for lenders. It is probably a relief for the borrowers. For lenders, there is anyways that additional provision of 5% which the RBI has mentioned in its circular yesterday. So there is a P&L impact even though it is quite marginal. Banks like Federal Bank have always been quite openly classifying these more conservatively than the PSU banks which need a little more help. So just on the back of a circular, I will not turn bullish on all PSU banks.