Indian Bank on Wednesday said its exposure to state electricity boards (SEBs) was limited, adding it hadn’t received any new requisition for loan restructuring from SEBs.
Chairman and Managing Director T M Bhasin said the majority of the bank’s loan restructuring for SEBs had been completed. The government’s restructuring package for SEBs would not have an impact on the bank’s lending, he added.
Bhasin said, “We have exposure of about Rs 5,000 crore to discoms. Of this, Rs 2,200 crore has already restructured. We have not received any requisition for restructuring the rest.” He added the debt restructuring package for state discoms announced by the government was good for power companies, discoms and banks.
Bhasin said even if bonds to be issued by SEBs didn’t have statutory liquidity ratio status, these would be guaranteed by state governments.
Bank officials said Indian Bank had exposure of Rs 7,000 crore to SEBs. States to which the bank has exposure include Gujarat, Maharashtra, Rajasthan, Haryana, Andhra Pradesh and Tamil Nadu. Loans to Haryana and Rajasthan SEBs have already been restructured.
The bank had restructured loans to SEBs in the last quarter and the last financial year, said a senior official. He added with the restructuring, the interest rates had been increased from 11 per cent to 12-12.5 per cent.
On Monday, the Cabinet Committee on Economic Affairs had approved the financial restructuring of discoms. According to the package, half their short-term liabilities would be taken over by state governments. The government estimates the accumulated losses of state discoms stood at Rs 1.9 lakh crore as on March 31 2011, and Rs 2.46 lakh crore as on March 31 this year.
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Indian Bank was expected to review its lending rates in the first week of October, Bhasin said, adding more credit offtake was likely in the second half of the current financial year, since this was the trend.
The bank on Wednesday launched two prepaid card solutions---a gift card and a travel card--- in collaboration with Master Card. The gift card for has denominations of Rs 1,000-50,000, with a validity period of a year from the date of purchase. The prepaid travel cards, to be initially issued in dollars, would have a three-year validity period, with the facility of multiple reloads. While the gift card would be offered through select branches, the travel cards would be distributed through the bank’s select foreign exchange authorised branches, company officials said. The bank is expected to distribute 1,00,000 travel cards and 2,00,000 gift cards through the distribution channels by March, 2013.
The travel card could be used in all the 30 million locations where Master Card could be used, said T V Seshadri, divisional president, South Asia, Mastercard Worldwide.