New Delhi:Twenty-eight top bankers of the country agreed to finance highway projects following a meeting with Union Minister for Road Transport and Highways Nitin Gadkari.
The minister met the bankers, including Deputy Governor of the RBI, State Bank of India, IndusInd Bank, Canara Bank, Punjab National Bank, Vijaya Bank, Indian Overseas Bank, Central Bank and Union Bank of India, in Mumbai.
He met the bankers following information that they did not sanction loan to builders engaged with the highway projects. Offering the bankers a business of Rs 5-7 lakh crore, Gadkari said there was some problem during the UPA Government, but now that had been worked out.
He said after meeting him, the banks agreed to finance the projects. Some of the bankers agreed to finance the projects up to Rs 80,000 crore.
An official said the bankers agreed to finance the projects after going through the presentation of the projects given by the ministry.
He said the ministry was in the process of awarding highway projects requiring Rs 1 lakh crore of capital under the hybrid annuity model, which would need support from banks.
“Under the hybrid annuity model, the government is bearing 40 per cent of the cost of the project and there is no scope for builders to misuse the capital from banks or the project not being completed as per the timelines. No project is being awarded if 90 per cent of the land is not available. We have to instil confidence in banks to start lending,” he said.