State Bank of India (SBI) and Life Insurance Corporation
of India (LIC) yesterday signed an MoU, which is expected
to remove the asset-liability mismatch for the bank in
financing long-term projects and provide LIC the opportunity
to increase its exposure to the infrastructure sector.
K Purwar, chairman, SBI, said that with this MoU, the
bank's disbursement to infrastructure will double in the
next one year.
the current fiscal, the bank has so far sanctioned loans
worth Rs6,000 crore to infrastructure projects. Loans
amounting to Rs2,500 crore have been disbursed of the
targeted disbursements of Rs7,000 crore this fiscal. We
expect the disbursals to the power sector to form 10 per
cent of our loan book," Purwar told newspersons after
signing the MoU.
total exposure to the infrastructure sector stands at
about Rs27,000 crore.
partnership will result in significant improvement in
the infrastructure sector," said Purwar.
SBI will evaluate the projects and fund them for short
term (up to five years), LIC will take the long-term risk.
The bank will continue to monitor the project till the
entire loan is repaid.
agreement also provides for a switch of assets from one
institution to another.
is targeted at infrastructure projects both in the public
and private sectors, covering power, telecom, ports, roads,
airports, tourism, agri-processing and warehousing. The
MoU will enable LIC to meet its regulatory requirement
of investing 15 per cent of its
funds in infrastructure and social sectors, said S.B.
Mathur, chairman, LIC. "The money and the willingness
to finance were always there but the projects were missing,"