Growing non-performing assets (NPAs) is a major hurdle for providing more finances to infrastructure projects, bankers told Finance Minister P. Chidambaram here on Monday.
“We conveyed to the Finance Minister that due to current dispensation regarding NPAs, there are difficulties in providing more finances,” State Bank of India Chairman Pratip Chaudhuri said, while talking to reporters after a meeting the Finance Minister had with bankers and industrialists here.
There would be more meetings and the government would take a final action, he added.
“In the pre-policy meeting with the Reserve Bank of India (RBI), we have asked for at least a 50-basis point cut in the Cash Reserve Ratio. As till the time CRR is not cut, the interest rate will not come down only with the repo rate cut. It is difficult to have a rate cut (by SBI) before the policy,’’ Mr. Chaudhuri said.
“We’ve identified 215 projects, which, for one reason or another, are stalled. We’ve identified another 126 projects that are new projects to which banks have sanctioned loans but which have not taken off,” said Mr. Chidambaram while mentioning about the projects in the western region. “We are sitting with bankers and industry to find out why a particular project has been stalled and try to remove that block,” the Finance Minister said. The main reasons are land acquisition, gas or coal linkages, environmental clearances, forest clearances and in some cases the inability or the unwillingness of the bank to restructure the loans. These apply to all the projects.
The Finance Minister took stock of the situation. But no promises were made.
“We have to deal with them project by project,” Mr. Chidambaram added.
The SBI Chairman said, “We spoke about the reasons why projects were stalled. Among the reasons, the most important ones were coal related, land acquisition and environmental clearance.”