Indian Bank rejigs Mumbai Metro loan account

Written by Pranav Nambiar | Mumbai | Updated: May 18 2012, 08:51am hrs
Indian Bank has restructured the Mumbai Metro loan account worth R108 crore in the March 2012 quarter. Indian Bank chairman and MD TM Bhasin told FE that this was on account of delays in handing over land to a depot, the construction of a bridge over the Andheri station as also in the right of way and other clearances.

The Mumbai Metro project was awarded by Mumbai Metropolitan Region Development Authority (MMRDA) through a global competitive bidding process on PPP framework to a Reliance Infrastructure-led consortium in 2007. It entails designing, financing, constructing along with the operating and maintaining about 12 kms of elevated metro with 12 stations enroute. The project borrowed loans from a group of lenders, of which Indian Bank's share is around 4-5%, said Indian Bank ED Rajeev Rishi. However, he added that only Indian Bank has restructured the money lent to Mumbai Metro as directed by the RBI. The other lenders have not done so as yet.

Rishi said that the restructuring was done after RBI officials conducted its Annual Financial Inspection (AFI) earlier in the year. AFI focusses on the statutorily mandated areas of solvency, liquidity and operational health of the bank. I cannot name the other banks that have also lent to Mumbai Metro. Maybe they were not asked to restructure the loan because a different set of RBI officials inspected these other banks and felt it was not necessary to restructure the loan, added Rishi.

In the March 2012 quarter, Indian Bank restructured loans worth R3,330 crore, taking the total tally of restructured accounts at the end of financial year 2011-12 to to R8,902 crore.