State Bank of India Chairperson Arundhati Bhattacharya described the lack of demand from State-run power distribution utilities as a concern for lenders. SBI’s exposure to power generation utilities stands at a mammoth ₹1.3-lakh crore.
“A number of discoms are yet to come up with the PPA (power purchase agreement). There is still a time lag,” she said. Power apart, the bank lent ₹45,590 crore to the construction sector and ₹80,610 crore to iron and steel-makers last fiscal. Bhattacharya described all these three sectors as areas of concern. The iron and steel sector is under pressure due to “dumping”.
Exposures to “construction” are mainly to turnkey contractors in roads, irrigation and power plants.
According to P Pradeep Kumar, Managing Director, the sector is suffering from delayed payments by State Governments and liquidity issues.