Banks Raise Concern Over ‘Stalled’ Multi-Crore Power Projects
A security guard walks past circuit breakers and transmission towers at the Sterlite Power Transmission Ltd. Gas Insulated Substation (GIS), which is under construction, in Amargarh, Jammu and Kashmir, India. (Photographer: Dhiraj Singh/Bloomberg)

Banks Raise Concern Over ‘Stalled’ Multi-Crore Power Projects

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Banks on Friday flagged concern over stalled projects in the power sector with an estimated exposure of over Rs 1.5 lakh crore, and urged the government to revive them to ease the non-performing asset situation.

A total of 34 mega projects across the country are on hold at present and about Rs 1.74 lakh crore of funds are stuck, said Ashok Kumar Pradhan, Managing Director and Chief Executive Officer of United Bank of India.

Pradhan was talking to reporters on the sidelines of the ‘State-level Inter-bank Group Meet’, a part of the bottom-up consultative process designed to generate ideas and review the performance of public-sector banks, and their alignment with national priorities.

“If those (stalled) projects are revived by the government through resolution through the Insolvency & Bankruptcy Code framework or any other mechanism, in one sector alone, such a huge sum of money will get released.... It will go a long way in easing the NPA situation,” he said.

The meet was attended by the zonal/state heads of major public sector banks.

Pradhan said the iron and steel sector is another stressed segment, but there has been some movement on resolutions in this space. “We are expecting more to happen.”

The meet focused on the ways and means to increase credit to various sectors of the economy, enhance the use of technology to bring about innovation and enable big data analytics, Ranjan Kumar Mishra, SBI Chief General Manager (Kolkata Circle), said.

“The consultation also laid stress on making banking citizen-centric as well as more responsive to the needs and aspirations of senior citizens, farmers, small industrialists, entrepreneurs, youth, students and women,” Mishra said.

Some of the suggestions and recommendations that the lenders would make to the government, based on the inter-bank consultations, are boosting the cyber security framework and digitisation of land records, especially in West Bengal.

“... We have told the government the (cyber) security environment has to significantly improve to gain the confidence of the rural masses in moving towards a digital economy... the banking and financial sector should be brought under a national grid to enhance security,” Pradhan added.

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