Key Points
MUMBAI : The growing optimism among bankers regarding the revival of infrastructure projects is not in sync with the sluggish growth in bank loans to the sector, data from the past several months showed...
Infrastructure loans in April grew 1.7% year-on-year to 12.2 trillion after a 0.7% contraction in the previous month, according to the latest Reserve Bank of India (RBI) data..
However, considering the governments push on infrastructure spending to crowd in private investments, the growth over the longer period of April 2021 to April 2023 is not as robust as expected..
Also, while bank loans to the infrastructure sector might seem to be growing at a sluggish pace, public financial institutions such as the Power Finance Corp. Ltd (PFC) and REC Ltd (erstwhile Rural Electrification Corp.) are financing projects, analysts said..
Bank lending to infrastructure must be seen in conjunction with loans given by public financial institutions, which in turn borrow from banks and the bond markets for onward lending," said Anil Gupta, senior vice-president and co-group head of financial sector rating firm Icra Ltd. ..
