No cap on bank lending to sector, RBI says
The Reserve Bank of India has not mandated any sectoral exposure limits on banks, and hence, banks should not say that having hit the limit for the power sector they are unable to lend to the renewable power sector. Banks may have their own internal sectoral exposure limits, but the RBI has not imposed any such limits, according to Dr K.C. Chakrabarty, Deputy Governor.
It is however true that the RBI stipulates lending limits with respect to borrowing entities, but there is nothing sector-wise, he said.
Dr Chakrabarty said in response to a query that players in the renewable-energy industry are finding it difficult to raise loans because banks say they have exhausted their ‘limits’ by lending to thermal power projects.