New Delhi, Feb 5 (SocialNews.XYZ) In a major fallout of the liquidity crisis and regulatory obstructions, Srei Infrastructure has decided to exit the infrastructure finance business due to non-conducive policy framework for providing loans to projects.
Speaking to IANS, Hemant Kanoria, Chairman Srei Infrastructure, however said that, the company would make a comeback whenever the regulatory framework turns conducive for infrastructure lending.
"For infrastructure lending, long-term funding is required... and clarity (is needed) that from where such funding can come from. At present there is no clarity...That is the reason we have decided not to continue with the infrastructure project financing," he said.
He said that in infrastructure sector a long-term asset is created for 10-30 years, but NPA norms pose a major risk for financing the segment.
"There are guideline NPA norms, there they say that if within a certain time the money does not come then they become NPA, after 90 days, you have to make so much of provisions..."
Kanoria further observed that the lending regulations are the same for consumer loans and infrastructure loans, which is not adequate for lending to infra projects.
"I think it is because of the policy now which is not aligned with the infrastructure financing business. That is the reason why we have decided that at present, we will keep it on hold and as the policy gets aligned for financing of infra projects, then we will again step into it."
The lending major's withdrawal from financing infrastructure projects reflects the grim reality in India's non-banking financing companies (NBFC).
In a bid to attract investments into infrastructure segment, the government recently, announced a National Infrastructure Pipeline worth around Rs $1.2 trillion investment, which would be sourced from private players.
In a recent interview to Bloomberg, the Kolkata-based Srei Infrastructure's Vice Chairman Sunil Kanoria said that the International Finance Corp-backed firm will now focus solely on financing purchases and leasing of equipment.
Source: IANS
About Gopi
Gopi Adusumilli is a Programmer. He is the editor of SocialNews.XYZ and President of AGK Fire Inc.
He enjoys designing websites, developing mobile applications and publishing news articles on current events from various authenticated news sources.
When it comes to writing he likes to write about current world politics and Indian Movies. His future plans include developing SocialNews.XYZ into a News website that has no bias or judgment towards any.
He can be reached at gopi@socialnews.xyz