Was the RBI move a big relief indeed for the MSMEs?
Yes. A lot of debate and discussion has happened over it and that should not vitiate the repayment culture. As a result, there has been an acknowledgement of the problems being faced by the MSME sector — right from DeMo to GST implementation. But this relief is being offered only to those who are GST registered and the total credit facilities from all the organised lenders mean the banks and NBFCs put together is less than Rs 25 crore including the non-fund based exposures.
I think that is a big relief. It has come immediately after the sunset of the earlier restructuring which ended on 31st December. Otherwise from 1st of January, the 90-days norm would have been applicable for the existing restructured ones and they would have come under the normal standardisation roadmap.
On your books, would you quantify the exposure to MSMEs? Also, what were the NPAs as of last quarter?
The cut-off had been kept up to Rs 25 crore. Our exposure is closer to Rs 20,000 crore. We have two segments in that – one is the commercial banking which starts from Rs 5 crore and that goes up to Rs 25 crore and below Rs 5 crore, there is business banking. It will be applicable mainly for about Rs 11,000 crore exposure.
Our understanding is that there is going to be a relief on the provisioning front. Are there any loans that you have provided for and where you are in a position to reverse them going forward? And is that also going to be captured in your numbers?
Details are yet to be received. Unless we get the full guidelines, I would refrain from making any comments but I think as of 31st December, we are already prepared for the normal provisioning required for this sector.