New Delhi: Bad loans have become a major concern for many banks, including some of the big names like SBI.
74 large projects have either turned into non-performing assets or where promoters have delayed paying the installments. It has put at stake the future of loans worth close Rs 55,000 crore that have been disbursed.
Public sector banks are already dealing with record levels of bad debt.
As per a report published in TOI, projects together envisaged an investment of close to Rs 3.5 lakh crore, with banks already having sanctioned over Rs 67,000 crore.
The list doesn't include several gas-based power projects that have been stalled for want of gas. In several cases, including Dabhol, lenders have refused to classify a loan as NPA to avoid any hit on their profitability - an issue on which the regulator and government have remained silent.
Estimates worked out by the lenders suggest that there is a need to pump in Rs 5,000 crore over the next fortnight to "regularize" the accounts, which means payment of dues will ensure that the loans remain "standard" keeping the health of banks as well as future lending to the promoters intact.
Fifty two projects are stalled either for want of regulatory clearances or fuel linkages or the inability of the project developer to raise more money to ensure that last mile hurdles are removed.
Getting stalled projects moving again was something that the Narendra Modi government wanted to continue after the success of the efforts by UPA during its dying days in office.
At a time when there is little sign of a pick up in investment in large projects, getting those in the pipeline for years is critical to boost demand for goods and create jobs, a key promise on which Modi managed to get majority in the Lok Sabha elections.