Encouraged by government incentive to raise long term funds through bonds, Bank of Maharastra is aiming to increase its infrastructure portfolio to 20 per cent of its total assets by 2015-16 from its present 14 per cent.
"We took opportunity from infrastructure bonds and hope the share of 14 per cent will increase to 17 by this year and 20 per cent by 2015-16," BoM Chairman and Managing Director Sushil Muhnot said on the sidelines of a Banking Conclave organised by FICCI.
The total outstanding asset of the bank is Rs 90,000 crore.
He said total benefit for the infrastructure bonds would be to the tune of one per cent in increased margin for the banks.
"We expect to launch these long term infra bonds in the next six months and they would be available only for incremental lending to the sector," Muhnot said.
Funds raised via these bonds would not be included in the computation of net demand and time liabilities; hence, exempted from the cash reserve ratio and statutory liquidity ratio caps if they were used for financing core sector projects and affordable housing loans. These bonds would be of a minimum maturity of seven years.
Muhnot expressed confidence that with government initiatives, NPA concerns for the existing portfolio in the infra sector like power and roads would gradually get resolved with favourable policies.
However, only time would tell about appetite for such papers due to their unsecured nature and current ratings of Indian banks.
