Country's largest lender, State Bank of India's Chairman, Mr. Pratip Chaudhuri has asked its associate basks to be cautious while lending short-term funds for long drawn projects.
Mr. Chaudhuri said this with specific reference to upcoming big ticket infrastructure projects in Kerala, where State Bank of Travancore (SBT), an associate bank of SBI is headquarted.
Mr. Chaudhuri has advised banks to look into how and when revenue stream from a project starts kicking in. It is much easier to take a decision on projects, for instance Metro or monorail, as it has an assured revenue stream.
But an assured revenue stream would not be possible for projects such as a flyover or a bridge, which propped up the issue of toll as a means of realizing costs over a period of time.
Mr. Chaudhuri said that SBI was sitting on a cash surplus of Rs 40,000 crore. It is willing to fund projects being executed by reputed contractors known for speed of implementation.