Indian Bank unaffected by relief to Discoms
The government-owned Indian Bank will not be affected much by the restructuring package announced by the central government for state electricity distribution companies (Discoms) as most of the loan accounts have been restructured recently, an official has said.
"We have already restructured some of our loans to state electricity distribution companies, and as such the measures announced by the central government will not have any major impact on us," Rajeev Rishi, executive director of Indian Bank, told IANS here Tuesday.
Rishi was speaking on the sidelines of the bank's press meet held to announce the launch of prepaid gift and travel cards. He said the bank has already restructured loans given to Discoms in Haryana and Rajasthan.
"We had an inkling about the central government package. We decided to restructure some of our loan accounts," Rishi said.
Indian Bank has an exposure of around Rs.7,000 crore to the power sector, of which around Rs.5,000 crore is accounted by the state power distribution companies. According to an official, around Rs.2,200 crore have been restructured.
The bank has exposures to power distribution companies in Gujarat, Maharashtra, Rajasthan, Haryana, Tamil Nadu and Andhra Pradesh.
Rishi said the bank has an exposure of around Rs.1,000 crore to the power distribution company in Tamil Nadu and the loan account is performing well.
The Cabinet Committee on Economic Affairs Monday approved the scheme for financial restructuring of Discoms.
Under the scheme, 50 percent of the outstanding short term liabilities up to March 31 this year are to be taken over by state governments. This would be first converted into bonds to be issued by Discoms to participating lenders, duly backed by state government's guarantee.
The balance 50 percent short term loans are to be restructured by rescheduling loans and providing moratorium on principal and at the best possible terms of interest.
The heavily debt-laden state electricity boards (SEBs) had piled up losses of around Rs.1,90,000 crore at the end of fiscal 2010-2011.
Among others, Tamil Nadu had losses of Rs.40,183 crore as of March 31, 2011, followed by Rajasthan (Rs.37,200 crore), Uttar Pradesh (Rs.35,211 crore), Madhya Pradesh (Rs.11,491 crore), Punjab (Rs.11.363 crore) and Haryana (Rs.6,505 crore).
The accumulated losses of the state Discoms are estimated to be about Rs.1,90,000 crore as on March 31, 2011, and Rs.2,46,000 crore as on March 31, 2012.
The objective of the proposed scheme is to enable the state governments and Discoms to carve out a strategy for the financial turnaround of the power distribution companies.