ICRA Quote on RBI measures to provide relief to exporter | Anil Gupta

“The proposed regulatory measures coupled with the credit guarantee scheme for exporters announced by Government of India could provide liquidity relief to exporters and help them ride out the near-term pressure on cashflows because of deferment of orders or payments. However, we will have to monitor the extent of moratorium or deferment availed by the exporters. A large quantum of borrowers availing either of relief measures could potentially increase the uncertainty on asset quality for the lenders. A five percent provisioning on such loans, where lenders have given a relief to exporters could also result increase in increase in provisions, but unlikely to have a material impact on near-term profitability.”