Saturday, May 5, 2012

Indian Banks Exposure to Coal Limits Lending to Solar, SBI Says

Indian banks have limited scope to boost lending to solar plants after funding for coal projects pushed them close to the limit for financing to the power industry, the nation’s biggest lender said.

Most banks are reaching their 15 percent cap on domestic advances to the power industry and it’s unlikely they’ll seek to separate renewable energy into another category to allow more lending, said S. Vishvanathan, chief executive officer of SBI Capital Markets Ltd., the investment banking unit of the State Bank of India. (SBIN)

“To change sectoral limits, you need approval from the board,” Vishvanathan said yesterday in an interview in Jodhpur in the state of Rajasthan. “What’s the rationale? They really are the same sector.”

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