Rediff.com« Back to articlePrint this article

Banks, RBI set to provide relief to power cos: SBI

January 19, 2012 15:38 IST

RBIBanks are working with the Reserve Bank of India to explore the possibility of extending loan repayment period for those power sector companies which are facing problems in project implementation, a top SBI official said on Thursday.

". . . risk in power sector is micro not macro. . . .

In some cases they (power companies) have said that implementation of project got delayed due to reasons beyond their control.

They want (us) to extend the moratorium.

"We are working with RBI how that can be done without the banks being required to make any provisioning," SBI chairman Pratip Chaudhuri said in New Delhi.

His comments come at a time when the power sector is grappling with acute fuel shortage and mounting losses of electricity distribution companies among others, which in turn is delaying many projects.

Such a scenario has also raised concerns of default by power entities.

Click Here For Rediff Realtime News!

The State Bank of India has not yet received any 'special request' from the power sector for restructuring of loans, he said, adding, "they are saying they would be in position to service their debts."

Speaking to reporters after pre-Budget consultation with Finance Minister Pranab Mukherjee, the SBI chief said the bank has an exposure of about Rs 32,000 crore (Rs 320 billion) in the power sector.

"We are giving loans to all big companies. . . It is not right for us to equate all the companies," he added.

Public sector banks had exposure worth over Rs 2.97 lakh crore (Rs 2.97 trillion) to the power sector at the end of second quarter of the current fiscal, with maximum credit doled out by SBI.

Country's leading public sector lender SBI and Bank of India accounted for nearly Rs 87,000 crore (Rs 870 billion) of the total loans given to the power sector till September 30, 2011.

Another major lender to the power sector is Punjab National Bank, whose exposure stood at Rs 20,410 crore (Rs 204.1 billion).

Maharashtra, Gujarat and Rajasthan are among the states that have been high amount of loans in the power sector from public sector banks.

© Copyright 2024 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.