SBS to fund only Gujarat SEZs

State Bank of Saurashtra (SBS) has decided to focus on funding the special economic zone (SEZ) projects in Gujarat only as the bank has reached its ceiling level for lending to the infrastructure sector.

Talking to Business Standard, S K Singh, managing director of SBS, said: "We have sanctioned Rs 900 crore for the infrastructure sector, of which Rs 500 crore is yet to be disbursed."

He also informed that the bank had already funded some major projects including two of Reliance's SEZs that are coming up near Mumbai. The bank has funded Rs 200 crore for the Reliance SEZs.

The bank had set aside Rs 1,300 crore for infrastructure funding that was sanctioned six months back before the new regulation related to the SEZ was issued by the apex bank (RBI). The bank has set a limit of Rs 700 crore for infrastructure funding, whereas its current exposure stands at Rs 900 crore, thus exceeding the limit.

When asked about the Reserve Bank of India's guideline to apply caution over funding SEZs, Singh, said, "We will be focusing only on SEZs that are coming up in Gujarat." The bank has set itself a ceiling limit of Rs 117 crore on one unit.

He also said the bank intended to take up the funding for Adani's upcoming SEZ in Gujarat, as it was one of the major bankers of Adani Group.

The bank plans to focus on business in Gujarat to become a major player in the state's banking sector for the next three years. Later, in the second phase, it would make efforts to become a national bank, Singh said, adding that they would take the organic route to become a national bank.

SBS registered a net profit of Rs 47.14 crore for the half-year ending September 2006 as against Rs 30.71 crore reported during the corresponding period last year.