Solar Projects, City gas and Infrastructure Bright Funding Spots: SBI

SBI Chairman has said that there is adequate availability of funds and opportunities are mainly in solar power, city gas, and infrastructure projects.

State Bank of India (SBI) Chairman Rajnish Kumar has stressed that there is adequate availability of funds with the banking system but he does not find enough projects where investment is being sought. He said even if there are projects, those are mainly in solar power, city gas projects and to some extent in the roads sector and infrastructure.

“Our first indication is that we are the largest financier of projects, we have a very big team for project finance and currently it is under-utilized,” Kumar said at the 92nd Annual Convention of industry body FICCI here.

“Last year, we did only two financial closures which can be said to be large tickets. One was HPCL refinery in Rajasthan where the project size is almost Rs 50,000 crore and the other was Mumbai Nagpur Super Communication Expressway where the project size is again Rs 50,000 crore and half of the money has come from the bankers.

“Other than that, I don’t have a project where funding demand is more than Rs 2,000 to Rs 2,500 crore today. So I want to ask you (industry), where are the projects? And if there are no projects then how do I lend and to whom I lend?” Kumar asked the industrialists to present at the convention.

The State Bank today has loan sanction limits of up to Rs 8 lakh crore, but the utilisation (demand) is of only Rs 5.5-6 lakh crore, the SBI chairman said.

He also nudged the industry to enrich their borrowing capacity so as to boost investment in the economy, asserting there is no dearth of funds and most of the banks will be in a better position by March-end as far as stressed assets and non-performing loans were concerned.

He also said that the State Bank of India (SBI) is underutilising its loan sanction limits as there is not enough credit demand from the industry.

“If India has to achieve its goal of USD 5 trillion economies then it cannot happen unless there is an investment in the economy. Today the outstanding banking credit is Rs 96 lakh crore. So for a $5 trillion economy, we would at least need to double it,” Kumar said He further said that it is a very good business opportunity for the banks.

He further said the industry keeps on complaining that banks are not lending and lenders are saying that “we are ready with funds, you are not borrowing”.

On the Centre’s infra development push, Kumar said, “When we talk about USD 1.5 trillion to be invested in the infrastructure sector, there is an opportunity for everyone. I don’t think the government can meet more than 25 percent of this requirement. So 75 percent will still be an opportunity for investors as well as the banks and the foreign capital.”

“And in such scenario, the opportunities which we (SBI) are seeing definitely is infrastructure, consumer lending… There is apparently a demand slowdown, but still, our housing loan portfolio, which is a large portfolio, (in that) we are still growing at 16 percent,” the SBI chief claimed.