The Reserve Bank of India (RBI) has warned that banks will not be able to sustain infrastructure financing as their long-term loans have already increased to almost 40 per cent from less than 20 per cent five years ago. | |
| Largely financed from shorter-term sources of funds, banks will have limited room to increase their long-term exposure, the RBI said in its "Report on Currency and Finance "� 2005-06" released today |
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| The combined share of medium-term and long-term loans in banks' loan portfolio at the end of March 2005 was 47.6 per cent, up sharply from 17.5 per cent at the end of March 1995. |
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| More than half of the term deposits mobilised in 2007 had tenures of less than a year, compared to less than a third term deposits in 2000, which will worsen the asset-liability mismatch. The RBI said inadequate long-term resources could affect India's growth, especially infrastructure development. |
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| Bank lending to the infrastructure sector at the end of March 2006 stood at Rs 1,08,787 crore, up 37.7 per cent from a year earlier. |
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| Power accounts for more than half the loans to infrastructure and telecommunications, roads and ports. |
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