Chennai: Bank credit to infrastructure sector grew by 18.5 per cent to Rs 10.55 lakh crore as of 2018-19, the highest since 2012-13 fiscal, RBI data showed.
Outstanding bank credit to the sector was Rs 8.91 lakh crore as at March 2018. In the fiscal year ended March 2013, loans to infrastructure sector had grown by 15.83 per cent to Rs 7.29 lakh crore. In FY18 and FY17, growth in bank credit to the sector was negative at 1.7 per cent and 6.1 per cent, respectively.
“Just because banks are sitting on pile of bad loans from the infrastructure sector, we cannot completely stop lending to the sector. There are couple of companies in the sector that are doing well,” said the head of a public sector bank.
Since the growth in the manufacturing sector is subdued, banks are also willing to lend to the infrastructure segment, he said.
Earlier banks had curtailed lending to the sector due to higher NPAs. “Post the asset quality review conducted by the RBI, all the NPAs from the infrastructure sector have been recognised. Banks are now willing to lend to the sector and demand for credit from the sector has also increased,” chief economist, Care Ratings, Madan Sabnavis, said.