RBI is concerned over the increasing loan exposure in realty & infra sector

By Accommodation Times News Services

rbiReserve Bank of India (RBI) Deputy Governor R Gandhi said on Wednesday said, “We are very much concerned about further exposure by banks into the real estate and infrastructure segment,” at an event organised by industry body Ficci. They are concern over increasing loan exposure to the real estate, housing and infrastructure sectors.

As per RBI data the real estate and housing sector now accounts for 13-14 per cent of the banks’ exposure. When infrastructure loans are included, the total exposure rises to 25 per cent of total loans.

Elaborating over their concern he said, that exposure to the real estate sector has gone up from Rs 60,000 crore in 2007-08 to Rs 1,54,000 crore now and housing exposure from Rs 2,60,000 crore to Rs 5,40,000 crore. Infrastructure exposure has more than doubled to Rs 8,40,000 crore.

Few infra loans extended by banks in the last couple of years have already become stressed assets. “Banks cannot put all eggs into one basket. When they have already reached 25 per cent, naturally they will have hesitation to increase it further. One cannot overexpose to one segment or sector,” he added.

Gandhi said the RBI was concerned about further exposure beyond these levels. “We have to take care of banking sector health, and, at the same time, we will have to support infrastructure growth. Natural growth will happen, but increasing the proportion beyond this may be a tall order,” Gandhi said.

He added, that the central bank has to balance the credit requirements of all the segments of the economy. Some sectors may get priority depending on the situation.

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