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Private Sector Banks Optimistic about Project Finance Revival

May 09, 2019

Private Sector Banks Optimistic about Project Finance Revival

Private banks do not have to contend with as many bad corporate loans as state-run banks. As a result, these banks are looking forward to the resumption of project financing, which used to be their mainstay in the past.

Project financing has come to a virtual standstill the last few years due to excess capacity and delays in approvals since corporate houses have been dealing with financial troubles and have not been able to avail finance for projects. However, it appears the troubles are already over for corporates and the capacity utilization has sprinted over 75%, creating hope among lenders. With the CAPEX cycle due to resume, private sector banks will end up being in a better position to focus strongly on corporates and structured finance.

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