“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.”




