We have witnessed growth of more than 30 per cent

01 Jan 2012 Editorial Team

DK Vyas, Chief Executive Director, Srei BNP Paribas

Srei BNP Paribas is amongst the largest NBFCs in India, with sectoral focus on infrastructure. Highlighting issues within this sector, DK Vyas, Chief Executive Director, Srei BNP Paribas also talks on the company's equipment finance division in conversation with Shriyal Sethumadhavan.

Highlight the issues in the infrastructure sector.
From the lender's perspective, there are several unsupportive regulatory issues. For instance, when we finance equipment for an NHAI project and the customer defaults in his contractual obligation, NHAI has the right to retain the asset, but we are not allowed to represent it, although we own it. On the contrary, if the lender is assigned the entire document by NHAI, he can step in and play the role of the developer and save the project to get his money back. Land acquisition is becoming another issue due to lack of coordination between the state and Central governments. Also, tolling equipment is not standardised. Lastly, we require a window wherein before bidding, a project should have received all the clearances involved.

What are your offerings for the equipment finance industry?
As compared to last year, this year, as of now, we have witnessed growth of more than 30 per cent. Although interest rates have increased profoundly, our unique floating interest rate concept with construction equipment financing has helped us maintain the net income margin. Here, the interest rate for a customer's purchase changes as per the existing market rate. We have already disbursed Rs 7,500 crore this fiscal and expect it to reach Rs 14,000 crore by March 2012. Another untapped area is used-equipment financing, which, despite being a huge market, is not organised. And we are creating a platform to provide an organised market by financing equipment for sellers and buyers, packaging it, refurbishing it from manufacturers or dealers we partner with and then redeploying them.

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