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Home News Power Sector News Banks reluctant to sanction loan to cash starved PSEB

Banks reluctant to sanction loan to cash starved PSEB

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PSEBThe public sector banks have shown reluctance in giving loans of to the cash-starved Punjab State Electricity Board (PSEB).Sources in PSEB said that fiscal position of board is in bad shape and the total debt liability including loan from government and banks of the state electricity board has risen 25 % as compared to last financial year, This year liability is estimated at Rs 16,000 core by end March against Rs 12,093 crore in 2007-08.

Bankers have not yet given its proposals to PSEB for loan worth Rs 1,200 crore for buying power and meeting working-capital requirements. Bankers are more worrying to raise deposit instead of giving advances in the last month current financial year.
Since elections have been around the corner and Punjab government has clearly conveyed to its chairman HS Brar not impose any power cuts in state. PSEB told to beg or buy power from different sources to meet the day to day requirements of the consumers.  Last month central bank of India has sanctioned loan of Rs. 750 crores to PSEB on 10 percent rate of interest.

The medium-term loan, having tenure of three years, is proposed to be used for meeting working-capital requirements while short-term loan is intended to be deployed for making payments towards purchase of power, coal and freight to railway and the tenure of loan would be one year, sources said.

PSEB has sought offer letters containing rate of interest and amount of loan offer along with other terms and conditions from banks regarding medium-term and short-term loan by March 19 and March 25, respectively, they said. 

Source - Punjab Newsline

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