 "FM meets bankers to review Rs 31,000-cr stalled projects")
Finance minister P Chidambaram today met chiefs of select public sector banks and industrialists to review stalled projects worth Rs 31,000 crore. These include steel and power projects, road projects in the eastern states of West Bengal, Bihar, Jharkhand and Orissa.
Banks have lent close to Rs 23,000 crore to these projects. "There was a discussion with the finance minister today to understand why these projects are stalled. Almost 90 per cent of them are stalled because of issues outside bank financing. Land and fuel supply are the main issues," Pratip Chaudhuri, chairman of State Bank of India (SBI), told reporters.
Beside Chaudhuri and his senior management colleagues in SBI, top officials of Allahabad Bank, UCO Bank and United Bank of India (UBI) also attended the meeting.
He added that some of the projects are getting stalled even though majority of banks are in favour of re-working the financing agreements.
"For instance, in some cases, out of 15 banks only two or three are saying no and the whole project is getting stalled. The finance minister was concerned. It is a big dilemma because the Reserve Bank of India (RBI) has said each bank must do their own due diligence. The finance minister requested us to take a more pragmatic view as it is very easy to say no," Chaudhuri said.
Most of the Rs 23,000 crore bank loans in these projects have already been restructured. Chaudhuri said banks and companies may need to pump in another Rs 8,000 crore to revive these projects.
Banks have lent close to Rs 23,000 crore to these projects. "There was a discussion with the finance minister today to understand why these projects are stalled. Almost 90 per cent of them are stalled because of issues outside bank financing. Land and fuel supply are the main issues," Pratip Chaudhuri, chairman of State Bank of India (SBI), told reporters.
Beside Chaudhuri and his senior management colleagues in SBI, top officials of Allahabad Bank, UCO Bank and United Bank of India (UBI) also attended the meeting.
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"Most of the issues are related to fuel linkages. For instance, some of the projects when they are coming to an end long-term power purchase agreements (PPA) are being demanded. It is difficult for companies to put together long-term PPAs in such a short notice," Chaudhuri said.
He added that some of the projects are getting stalled even though majority of banks are in favour of re-working the financing agreements.
"For instance, in some cases, out of 15 banks only two or three are saying no and the whole project is getting stalled. The finance minister was concerned. It is a big dilemma because the Reserve Bank of India (RBI) has said each bank must do their own due diligence. The finance minister requested us to take a more pragmatic view as it is very easy to say no," Chaudhuri said.
Most of the Rs 23,000 crore bank loans in these projects have already been restructured. Chaudhuri said banks and companies may need to pump in another Rs 8,000 crore to revive these projects.