News Brief | January 2013
Banks seek assurance on loans to Power Cos
Public sector banks have cautioned the Union government that credit worth around Rs 2.3 lakh crore to private-sector power companies are on the verge of turning into bad-loan on books. The public sector banks including the State Bank of India, Punjab National Bank and Oriental Bank of Commerce have sought the finance ministry's intervention to salvage the situation and have been assured of help. Even as the Rs 2 lakh crore debt restructuring for state electricity boards and distribution companies is about to take off, bankers have sought an assurance from finance minister P Chidambaram. Bankers also urged the finance minister to discuss the matter with the ministries of power, coal, petroleum and environment in order to get an assurance in order to cut-down bad-loans on their books. It is being expected that large investments into generation projects have failed to draw any returns so far and defaults by power companies could be turn out to be a threat to the economy.