[DRAFT] The 10-trillion-rupee opportunity hidden in an RBI circular

From The Tantri Files — verbatim writing from Prof. Tantri’s WhatsApp messages, with his blessing. This post stitches together a week of his commentary in early April 2025 in the INFS Co25 group, all of which orbited around a single RBI draft circular he wanted his students to *actually read.*

“When you see a piece of news like this, you should go and see what is actually happening”

Early April 2025. Newspapers were carrying headlines about treasury heads urging the RBI to cut the CRR and ensure surplus liquidity. Tantri, in the group:

Tantri (Apr 2). Treasury Heads Urge RBI to Lower CRR, Ensure Surplus Liquidity — when you see a piece of news like this, you should go and see what is actually happening.

He linked the RBI’s actual liquidity press release and continued:

Tantri. See here. Most of the money is in SDF (₹2 trillion). If liquidity is so deficient, then why are banks parking in SDF?

This is where economics comes in. In my view, what is changing is risk premium. When rates go up, risk premiums also go up. They have to cut rates; doing OMOs will not help.

A classmate: So banks are parking instead of lending?

Tantri. Your question has the answer. They are parking money in SDF rather than lending. Increase in risk aversion leading to higher risk premium. That will dampen demand. Lower credit growth and higher rates is the consequence.

The “super boring” circular

A week later, the RBI dropped a set of draft circulars. Tantri picked the one almost everyone else missed:

Tantri (Apr 11). RBI has issued a number of draft circulars — co-lending, partial credit enhancement, gold loans and others. Please read them and try to give your comments.

Tantri (Apr 12). Folks,

Please read this super boring circular carefully.

In essence, RBI is allowing banks and NBFCs and banks and banks to co-lend. This was limited to certain categories of loans. Now, it will be open to all.

He linked the draft co-lending circular, and then — the line every student in that group screenshotted:

This means you will have great opportunities to become an intermediary who helps banks identify NBFCs’ assets to co-lend.

This could be a 10 Trillion Rupee business.

Please take this seriously.

A few minutes later, when classmates pointed out that someone was already doing it:

Tantri. Here you go. Someone is doing it. Looks like, it is a one player market. Some of you please consider taking a plunge. I will definitely help you with industry and regulatory connections.

You did not come here only for grades and placements.

https://www.go-yubi.com/

He added the next morning:

Tantri. But the area is expanding with the new circular. Beyond priority sector. There is a big opportunity here.

“Please read about how fintechs are shifting to deposits”

The same week, in his Hyderabad farewell to the just-graduated INFS batch:

Tantri (Apr 5). Please read about how fintechs are shifting to deposits in today’s newspapers. May be an interesting business opportunity.

And, separately, on the Gensol collapse that had broken the day before:

Tantri. Please read about this Gensol story as you step into the real world. Just because you are into a trendy business, it does not mean you can get away by ignoring basic rules of corporate finance (btw, there is nothing called FCRV).

Free cash flows belong to shareholders and the company should keep it only if it can put it to better use than shareholders.

You should not invest just because you have free cash flow and you have an idea that others are likely to buy into. Most such well-intentioned expansions destroy value.

He shared the Economic Times piece on Gensol, and added the lesson he wanted students to actually internalise:

This applies to ISB as well. Free cash flow can be either the best friend or biggest enemy of management, depending on how you use it.

A classmate noted that PFC had been involved.

Tantri. We at PFC funded BlueSmart. Even I did not oppose. Got carried away hearing EV, renewables etc.

We also try to fool you by naming our courses in a trendy way (FCRV, for instance). These days one way to fool you is using trendy words such as these. AI is another trendy stuff. Talking to many fintechs, I am realising that none of them use any serious AI.

You have to be careful with these.

And then a small recanted celebration

A week later, when CPI for March came in at 2.8%:

Tantri (Apr 15). The RBI massively overestimated inflation. Remember this important lesson from INFS. You will know that the true real rate only in the subsequent year. We now know that last year we ended up paying a real rate of 3.5 percent. No wonder the economy is slow.

And, the lesson he wanted them to keep:

Remember, inflation less than expected inflation is also dangerous. Should not be celebrated.

What to take from this

Two things, really:

First, the framework Tantri uses to read the news is not “what’s the headline?” but “what’s the actual instrument doing right now?” When the headline said “liquidity deficient”, he opened the RBI release and noticed ₹2 trillion sitting unused in the SDF. The headline was wrong. The risk premium was up.

Second, he believes the RBI’s draft circulars are where the biggest opportunities for the next decade are quietly being created. The April 9, 2025 co-lending circular is a textbook example. Nobody is going to write a Bloomberg article calling it a 10-trillion-rupee opportunity. He did, in WhatsApp, in passing.

If you’re reading this and you’re early in your career — that’s the takeaway he kept hammering: read the boring document yourself, don’t take the newspaper’s word for what’s in it.

Editor’s notes

Drawn verbatim from messages in the INFS Co25 WhatsApp group between April 2 and April 15, 2025. Light contextual prose has been added; Tantri’s words are unchanged apart from the standard typo cleanup and the rendering of asterisk-emphasis as italics. Student questions have been paraphrased and anonymised.

The April 9, 2025 draft co-lending circular is publicly available on rbi.org.in. Yubi (formerly Credavenue), the company Tantri pointed at, is at go-yubi.com.