Chart of the day: Is lending to the infrastructure sector back with a bang?
Infrastructure lending had become taboo as it was the biggest source of toxic assets for banksPower, telecom and roads have all shown healthy growth
Loans to the infrastructure sector grew at a brisk pace of 12.5% in January as against a drop of 2.9% a year ago, shows recent data published by the Reserve Bank of India. The growth is also more than twice that of the overall loans to industry.
Lending to infrastructure has grown steadily over the last six months, from being negative in the previous three years. Power, telecom and roads have all shown healthy growth. Bankers have been saying that they are not averse to the infrastructure sector, and that lending to good projects is on. The power segment has the biggest share in infrastructure and loans here have grown by 7.55% in January.
Infrastructure lending had become taboo as it was the biggest source of toxic assets for banks. The troubles at Infrastructure Leasing and Financial Services Ltd was yet another sign of continued stress. The latest lending data, however, suggests the sector is finally emerging out of its troubles.
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