Infra lender National Bank for Financing Infrastructure and Development (NaBFID) has said that lack of data on the sector is making it difficult for them to convince the regulator about the need for higher provisioning for project loans in the sector.
“For retail, there is credit bureau but similar thing in infra is not available But for the credit bureaus, where would have been the fintechs” said NABFID MD and CEO Rajkiran Rai .” Nabfid is a new organistion and when we were looking at pricing, we were looking for numbers (on losses). Nowhere is it available. Whatever is available is lopsided data, is not correct data”
“When we were looking at pricing, we were looking for numbers (on losses). Nowhere is it available. Whatever is available is lopsided data, is not correct data. But for the credit bureaus, where would have been the fintechs. Such data is not available for the infrastructure sector” said NABFID MD and CEO Rajkiran Rai indicating that the sector does not have end to end data like retail or MSMEs .
The Reserve Bank has recently proposed a 5 percent provision on project loans under its draft guidelines for project loans which is expected to impact bank profitability and viability of such loans. ” Is 5 per cent true? HAM has zero default, solar financing is zero default. Now, where is 5 pc coming from? Actually it is less than 1 per cent. But then, you don’t have data to talk to the regulator. You need to have the data”.
Rai was speaking at a seminar organised by the Indian Banks’ Association (IBA) and Ficci. NaBFID is in the process of setting up an infrastructure repository that would strengthen the database through use of analytics and give an end to end data on infrastructure projects that will help all stakeholders including the regulators and lenders, according to Rai
” NABFID will be sourcing data from banks, infrastructure companies and from other government entities such as National Highways Authority of India (NHAI) and get all the data under one entity” Rai said at the sidelines of a conference .
Speaking at the same session IDBI Bank MD and CEO Rakesh Sharma said that there is a good scope for increasing deposits as the lending is happening in job creating projects which in turn will incentivise savings and deposit growth.
