The Union Finance Ministry has cited some suggestions as part of its attempts to improve the risk management practices of the public sector banks (PSBs) with regard to the roads sector. PSBs have now been asked to disburse loans only after National Highways Authority of India or State governments have acquired 100 per cent ‘right-of-way’ for the road projects.
The government has also suggested that promoters be asked to bring upfront at least 50 per cent of their contribution to the special purpose vehicles (SPVs). These recommendations came at a recent meeting convened by the Finance Ministry with senior management of PSBs, official sources said.
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