Federal Bank, the largest and the oldest private sector lender in Kerala, will completely stop funding for thermal power projects by 2030, according to a senior bank official.
As a first step towards its de-carbonisation initiative, the Kochi-headquartered bank will halve its exposure to the thermal power sector by 2025.
The bank's green power sector exposure is ₹5,083 crore across seven to eight projects, mostly solar and wind areas.
“We have internally set a target of completely stopping funding thermal power projects/traditional energy sector by 2030. As a first step towards achieving our decarbonisation efforts, we will be halving our exposure to this polluting sector by 2025,” Ashutosh Khajuria, the chief mentor at the bank, told PTI here.
Currently, the bank’s green loan book is ₹5,083 crore and the sanctioned book of ₹7,490 crore. “We see our green book crossing ₹13,000 crore by 2025,” Khajuria, who retired recently as an executive director of the bank, said.
On the overall growth, he is confident of the bank continuing to clock 20% credit disbursal growth this fiscal driven by home, business and gold loans.
The bank's home loan and LAP (Loan Against Property) books are worth ₹35,000 crore. Out of the total, around ₹15,000 crore is LAP and the gold loan book is ₹22,000 crore, which is more than 10% of its ₹1.96 lakh crore assets.
According to Khajuria, the fall in remittances in the first quarter was nothing but a reflection of the exchange rate fluctuations and expressed confidence in continuing to maintain the more than 20% market share in the segment.
Last year, the country netted $107 billion in remittances and 21% of the total amount was through the bank’s channels, Khajuria said.
The market share remains the same despite the marginal fall in the inflows due to the exchange rate volatility of recent months and the year will close with over $100 billion inflows.
Khajuria also said a funding of ₹980 crore from the IFC will be reaching the bank's coffers anytime as all the approvals, including that of the RBI are in place now.
The World Bank arm IFC was awaiting RBI nod to invest ₹980 crore in the bank for some time now.
In July, the bank had concluded a successfully Qualified Institutional Placement (QIP) issue for ₹3,000 crore, Khajuria said.
