The Reserve Bank of Indias (RBI) restructuring scheme for loans to micro, small and medium enterprises (MSME) loans up to Rs 25 crore has been hailed as a welcome breather, but a deeper malaise may be lurking.
A former chief executive of a state-run bank (and now a director on the board of a private bank) feels the stress is much higher than what has been reported. It could be at 21-22 per cent of MSME loans. These levels will not be reflected in reported numbers due to restructuring. Had the debt recast not come through, MSMEs woes would have become a major issue at the time of elections. For plenty of units still continue to reel under the adverse effects of demonetisation and the t…
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