State Bank of India reduced its loans to the telecom sector by 17.30 per cent last year, details given by the bank shows. Most companies in the telecom sector are not doing well due to severe competition in the market.

State Bank of India’s outstanding loans to the telecom sector stood at Rs 15,590 crore as at end March 2012, compared with Rs 17,643 crore a year earlier.

On the other hand, the bank has raised its exposure to the power sector by 20 per cent. Its outstanding loans to State electricity boards and other public and private power projects stood at Rs 37,055 crore, accounting for half of its loans to the entire infrastructure sector (Rs 76,503 crore).

Of the Rs 37,055-crore, as much as Rs 9,000 crore is due from the various State Electricity Boards. (Most State Electricity Boards are in the red. Banks had to restructure loans of (at least) one of them — that of Rajasthan — in the last quarter of last year.)

State Bank also increased its loans to ‘roads and ports’ — to Rs 15,508 crore, from Rs 12,726 crore earlier — a rise of 22 per cent.

Overall, SBI’s loans to ‘infrastructure’ went up 8.38 per cent last year, to Rs 76,503 crore.

‘Infrastructure’ is perceived to be a problem area for banks as loans here have a tendency to turn non-performing. Last year, SBI’s non-performing infrastructure loans amounted to Rs 1,275 crore, or 3.4 per cent of the infrastructure loan portfolio. But this was after the bank restructured Rs 3,847 crore of infrastructure loans.

The power sector accounted for the bulk (Rs 2,319 crore) of the restructured loans.

>mramesh@thehindu.co.in

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