+
SBI boosts infra funding in FY22 on signs of private capex pickup
ECONOMY & POLICY

SBI boosts infra funding in FY22 on signs of private capex pickup

State Bank of India (SBI) has doubled down on loans to the infrastructure sector, including roads, ports, and power in financial year (FY) 2022, amid renewed demand for credit from private firms.

About 10% of all new loans from the lender by value were towards the infrastructure segment in FY22, as against 3% in the last FY, showed Basel III disclosures by the SBI bank. SBI’s exposure to all industries was raised by Rs 3.5 trillion in FY22–both fund-based and non-fund-based – of which incremental loans to the infrastructure segment were at Rs 34,167 crore.

In the prior financial year, SBI’s exposure to all industries grew by Rs 1.5 trillion from FY20, of which infrastructure sector loans accounted for Rs 4,614 crore.

The state-owned lender seems to have stepped up its efforts to finance infrastructure at a time the government is aggressively moving capital expenditure to prop up a Covid-19 hit economy.

The government allotted Rs 7.5 trillion for capex spending in FY23, 35% higher than the last FY. Bank loans to the infrastructure segment rose 10% from a year earlier in April, Reserve Bank of India (RBI) data indicated.

The banking industry experts said that infrastructure financing was not occurring for the longest time, mainly after the stress post the last round of financing, which involved coal, power, and a few other sectors. Banks were also partly because they lacked sufficient capital to finance large infrastructure projects. Fresh projects at initiation are generally risky and not very capital efficient, directing banks to allot more capital against such lending.

Fitch Ratings senior director (Indian bank ratings), Saswata Guha, told the media that things have slightly improved, although the recovery is not a broad-based one. State banks are still relatively cautious and picky as their capital buffers are still relatively weak.

Earlier, SBI has also seen improved utilisation of loans approved but is only now being put to use by firms. About 46% of SBI’s working capital limits remain unutilized as of 31 March, against 50% at the December end of last year. For term loans, unused credit is approximately 19% of the approved amount, and the bank feels this points to the potential credit offtake in 2022-23.

Image Source

Also read: HDFC Bank leases office space at Mindspace REIT's park for 10 years

State Bank of India (SBI) has doubled down on loans to the infrastructure sector, including roads, ports, and power in financial year (FY) 2022, amid renewed demand for credit from private firms. About 10% of all new loans from the lender by value were towards the infrastructure segment in FY22, as against 3% in the last FY, showed Basel III disclosures by the SBI bank. SBI’s exposure to all industries was raised by Rs 3.5 trillion in FY22–both fund-based and non-fund-based – of which incremental loans to the infrastructure segment were at Rs 34,167 crore. In the prior financial year, SBI’s exposure to all industries grew by Rs 1.5 trillion from FY20, of which infrastructure sector loans accounted for Rs 4,614 crore. The state-owned lender seems to have stepped up its efforts to finance infrastructure at a time the government is aggressively moving capital expenditure to prop up a Covid-19 hit economy. The government allotted Rs 7.5 trillion for capex spending in FY23, 35% higher than the last FY. Bank loans to the infrastructure segment rose 10% from a year earlier in April, Reserve Bank of India (RBI) data indicated. The banking industry experts said that infrastructure financing was not occurring for the longest time, mainly after the stress post the last round of financing, which involved coal, power, and a few other sectors. Banks were also partly because they lacked sufficient capital to finance large infrastructure projects. Fresh projects at initiation are generally risky and not very capital efficient, directing banks to allot more capital against such lending. Fitch Ratings senior director (Indian bank ratings), Saswata Guha, told the media that things have slightly improved, although the recovery is not a broad-based one. State banks are still relatively cautious and picky as their capital buffers are still relatively weak. Earlier, SBI has also seen improved utilisation of loans approved but is only now being put to use by firms. About 46% of SBI’s working capital limits remain unutilized as of 31 March, against 50% at the December end of last year. For term loans, unused credit is approximately 19% of the approved amount, and the bank feels this points to the potential credit offtake in 2022-23. Image Source Also read: HDFC Bank leases office space at Mindspace REIT's park for 10 years

Next Story
Real Estate

Shriram Properties Launches ‘Codename: The One’ in Bengaluru

Shriram Properties (SPL), a leading real estate developer focused on the mid-market and mid-premium segments, has announced the launch of its latest residential project under the banner “Codename: The One” in Bengaluru’s Electronic City corridor. This feature-rich gated community will offer 340 spacious 2- and 3-BHK residences, with a total saleable area of approximately 5 lakh square feet and an estimated revenue potential of over Rs 3.5 billion. The project is expected to be developed over a span of more than three years.  Strategically located near the Bommasandra Metro stat..

Next Story
Resources

India Warehousing Show 2025 Closes with Strong Global Presence

The 14th edition of the India Warehousing Show (IWS) 2025 concluded successfully at Yashobhoomi (IICC), Dwarka, drawing participation from over 300 exhibitors across 15 countries and welcoming 15,000+ visitors. Recognised as India’s leading platform for warehousing and logistics excellence, IWS 2025 offered a comprehensive display of cutting-edge automation, sustainable warehousing solutions, and next-gen supply chain technologies. The show was inaugurated by Shri Pankaj Kumar, Joint Secretary – Logistics, DPIIT, Ministry of Commerce and Industry, Government of India. In his opening a..

Next Story
Equipment

MHIET Launches 450kW Gas Cogeneration System with H₂ Co-Firing

Mitsubishi Heavy Industries Engine & Turbocharger (MHIET), part of the Mitsubishi Heavy Industries Group, has launched a new 450kW gas cogeneration system, the SGP M450, jointly developed with Toho Gas Co.,. The system supports hydrogen co-firing at up to 15 vol per cent, with no loss in performance or reliability.  The system is currently available in the Japanese market, and has been developed from the existing GS6R2 city gas engine platform. Key modifications were made to the fuel gas and engine control systems to enable hydrogen co-firing.   Verified through de..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?