RBI Measures Could Alleviate Pain for MSMEs
To help Small Borrowers and retail segment Jewellery Market Bureau: India Ratings and Research (Ind-Ra) opines the stimulus measures announced by the Reserve Bank of India (RBI) to tackle the second covid wave would help contain the pressure on the banking system’s asset quality, especially for micro, small and medium enterprises (MSMEs) and retail segment. Banks can also support the incremental credit needs of small businesses through a reassessment of their working capital requirement, though the system’s propensity, in absence of external stimuli, could be tested as the perceived risk would be elevated amid the prevailing challenges. Consequently, both delinquencies (at least in 1QFY22) and the quantum of restructured assets could be higher than last year, given that there is no moratorium without restructuring. Assistance to SMEs/MSMEs Continues through All Lenders: The RBI has permitted restructuring of MSMEs in line with the notification dated 6 August 2020; invocation ca