According to the Reserve Bank of India's figures, if the total sanctions and disbursements of all-India financial institutions for the last three years, from 1996-97 to 1998-99, are added up, the gap amounts to Rs 73,718 crore.What's more, there are no signs of any reduction of the gap. Over April-November 1999, the gap between sanctions and disbursements of ICICI, IDBI and IFCI amounted to Rs 25,306 crore, while it was Rs 23,353 crore for the corresponding period of 1998-99. Clearly, sanctions continue to run far ahead of disbursals. Except for IFCI, which has been faced with a financial crunch, and whose disbursements, at Rs 1953 crore, have outstripped sanctions at Rs 1,648 crore for the eight months to November this fiscal.

IDBI sources say that the chief reason for this state of affairs lies in infrastructure, where large projects have been sanctioned funds, but financial closure has been held up. This is especially true for the power sector, where projects have not taken off for one reason or another.

Analysts point out that the figures prove that lack of finance is not what is holding back infrastructure projects. "If operational problems can be sorted out, funds are not a problem," says an IDBI general manager. A power ministry document shows that, out of 63 power projects which have tied up finances with financial institutions, only 6 have had funds disbursed to them.

IFCI has the best track record in terms of disbursing sanctioned funds, and over the last three-and-a-half years, its disbursements amounted to 69 per cent of sanctions. IDBI came second, with disbursements being 61.9 per cent of sanctions, while ICICI's disbursements were 59 per cent of sanctions.

during the eight months to November, this percentage fell for both IDBI and ICICI, being 57.5 per cent and 48.8 per cent. Perhaps more importantly, analysts say that according to BIS standards, 50 per cent risk weights need to be kept on the committed but undisbursed portion of funds in a year.

Essentially, that means if there is Rs 100 crore of undisbursed sanctions, risk-weighted capital, at the rate of 8 per cent of assets, needs to be set aside for Rs 50 crore of that amount. Undisbursed funds therefore have a very real cost.