Private sector borrowers are likely to be impacted in multiple ways. The sharp spike in borrowings would mean that despite rate cuts, private sector borrowers could find their cost of borrowing go up. The first hint came from SBI hiking the minimum lending rate for home loans by 30 bps. Other than the most blue chip borrowers, others find it really hard to get funds. This is true of most NBFCs and smaller companies across India. This spike in borrowings could also result in a spike in bond yields pushing up the costs across the borrowing spectrum. It also leaves RBI with little incentive to cut rates in the absence of transmission. Above all, there is the risk of crowding out of private borrowers from the market. With central government set to borrow Rs.12 trillion this year and states to follow, private borrowers may have a tough time getting interested lenders. Stressed private sector borrowers could find the going really tough.