It is to be appreciated that banks are highly leveraged bodies that lend money placed by depositors with them and therefore, have to practice prudent lending and be cautious and sure of the safety of the money of their depositors.
On the cost of credit, while interest rates have been deregulated by Reserve Bank of India, my message to the MSME sector is that as interest costs are a very small fraction of their operating costs, only approximately 4%, do not ask for low interest rates from the banking sector, and instead ask for credit at competitive rates.