INFRASTRUCTURE HOLDS POTENTIAL FOR BANKS

Mr. Upendra Kamath, Executive Director, Canara Bank has said that the infrastructure sector holds a lot of potential for banks, with lending opportunities of $130-140 billion due to recent push for infrastructure by the Government.

Commercial banks are being allowed to take exposure in infrastructure projects where IIFCL or IDFC are leading financiers. RBI has also taken a liberal view on the risk weightage of those projects where take-out financing has been organised.

Mr. Albert Tauro, Chairman and Managing Director, Vijaya Bank said "The Government's decision to open up development of toll roads, airports, ports etc. to the private sector, is driving up investment."
However, in Mr. Ashvin Parekh, Partner and National Leader - Ernst & Young's view, banks may face some difficulties, especially long-tenored funding in the infrastructure space as projects such as roads are not preferred because of their long tenure, while funding for ports is preferred as the turnaround time is much less.
Source: http://www.thehindubusinessline.com/2009/12/07/stories/2009120752591000.htm