At a time when the Centre is pushing for road projects, State Bank of India — the country’s largest lender — has reduced its exposure in the sector due to uncertainty in monetising the assets.

According to a presentation made by the bank, advances to the roads and ports sector fell 16 per cent in FY17 to ₹15,985 crore from ₹18,934 crore in the year-ago period. The segment accounts for only 1.19 per cent of SBI’s total domestic loan portfolio.

“We are reducing exposure in the roads sector due to uncertainty of monetising these projects. Land acquisition continues to be a major issue,” a senior official told BusinessLine .

SBI, the official said, is seeking clarity from the government on the rules so as to ensure recoveries and also to protect its loans from going bad. Though road and ports constitute only 1.19 per cent of the bank’s domestic loan portfolio, the sector contributes nearly 10 per cent of the ₹32,427 crore loans identified by the bank on its “corporate watch list”, indicating that these assets may turn bad in FY18.

Increase in power

Interestingly, in FY17, SBI increased its exposure to the power sector by 7 per cent. This is irrespective of the fact that 34 per cent of the loans which will remain under watch (watch list) in FY18 were given to the power sector.

The other sectors where SBI has reduced its share of loans on a year-on-year basis are telecom (12 per cent), engineering (25 per cent) and textiles (16 per cent). In the telecom sector, the loan portfolio came down to ₹18,821 crore (₹21,445 crore), in textiles to ₹36,748 crore (₹43,605 crore), and in engineering to ₹21,369 crore (₹28,491 crore).

Exposure to iron and steel, trade and other infrastructure sectors has also been reduced.

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