Nine public firms join hands to fund infra project

New Delhi: As many as nine state-owned financial institutions, including SBI, Punjab National Bank, Bank of Baroda and LIC, have joined hands for consortium lending to infrastructure projects having worth over Rs 1,000 crore each.

The country's nine largest PSU lenders have formed a consortium for jointly financing infrastructure projects with a project cost of Rs 1,000 crore and above, IDBI Bank said in a statement.[caption id="attachment_356834" align="alignleft" width="380" caption="Gathering money. Andrew Middleton"][/caption]

These financial institutions are State Bank of India, Punjab National Bank, Bank of India, Bank of Baroda, Canara Bank, Union Bank, IDBI Bank, IIFCL and LIC.

The consortium aims to speed up the sanction process, bring uniformity in the approach and terms of lending, thereby facilitate early financial closure of the infrastructure project, it said.

Banks have been cautious to lending to infrastructure projects due to various reasons, including land issues.

The country's poor infrastructure, which is seen as a major bottleneck for economic growth, requires an estimated investment of a whopping $1 trillion in the 12th Plan (2012-17). Of this, 50 percent is expected to come from the private sector.

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Earlier this month, Prime Minister Manmohan Singh had set an investment target of at least Rs 2 lakh crore for core sector projects in the current fiscal in a bid to revert back to 9 percent economic growth.

"In these difficult times, we must do everything possible to revive investment and business sentiment, both public and private. We must work to create an atmosphere which is conducive to investment and to removing any bottlenecks to growth," he said.

PTI