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The Finance Ministry today asked the RBI, public sector banks and other stakeholders to put in place a co-ordination mechanism to resolve the issues facing large infra projects so that investment cycles can be revived.
At a meeting chaired by banking secretary Hasmukh Adhia with RBI deputy governor S S Mundra and special secretary at Union Power Ministry R N Choubey with the heads of public sector banks, REC and PFC, as many as 85 large infra projects in power, steel, roads and port sectors were reviewed.
These projects involve investment of Rs 3.51 lakh crore of bank funding; and of these, 4 per cent have turned dud assets.
"The main purpose was to understand the various reasons for stress in some infrastructure projects, have a better appreciation of what are the factors which are affecting the health of infra projects and also to put in place a coordinated mechanism for dealing with the stressed projects," Adhia told reporters after the meeting.
The banking sector was represented by 13 members including SBI's Arundhati Bhattacharya, IBA chief T M Bhasin, IDBI Bank's M S Raghavan, Andhra Bank's S Rajendran, among others, apart from officials from Power Finance Corporation and Rural Electrification Corporation.
The meeting assumes importance as corporates have started complaining that despite the best efforts at the government end, no work is happening at the ground level, indicated by the near flat growth in corporate loan disbursals by banks.
RBI deputy governor Mundra said some of the issues discussed were around inter ministerial clearances.
"Discussions were held around the regulatory prescriptions and expectations. So, the RBI will certainly examine all those issues within the over-arching regulatory framework," Mundra said.
Adhia said factors such as delay in approvals and land acquisition, finalisation of power purchase agreements, lack of fuel availability/linkages for the power projects and coal linkage issue have led to stress in infrastructure projects.
"Only 4 per cent of these (85) projects are NPAs. This is a preventive step as all the problems are common to many of them and we want to address those common problems by intervention of policy measure by the ministry or some collective measure by banks," Adhia said.
