Increase in credit exposure to power sector not required: RBI

NEW DELHI: Reserve Bank of India has declined demand of private companies to increase credit exposure limit of banks for power companies.

However, a proposal to increase exposure limit of banks for power sector companies by five percent over the existing limits was under consideration, minister of state for power K C Venugopal informed Rajya Sabha on Monday.

“Department of financial services has indicated that as per Reserve Bank of India, the current exposure limits are way above the internationally accepted exposure limit norms. RBI has further indicated that the existing exposure ceilings stipulated is adequate and no further increase in the limits is warranted,” he said.

The power ministry has not received any report regarding power project developers facing scarcity of funds, he said.

Power Finance Corp and Rural Electrification Corp have been authorised as infrastructure finance companies to lend additional five percent funds to private sector. Renewable energy projects can avail loans from the two companies provided they meet the terms and conditions of the loans, he said.