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Tighter provisioning norms may hit banks’ margins

Tighter provisioning norms may hit banks’ margins

Following the tightening of norms on provisioning for restructured loans by Reserve Bank of India (RBI), banks might have to set aside Rs 1,500-2,500 crore as provisions in 2013-14 for their existing recast loan book. Ratings agency Icra said this in a report. Recently, the central bank said banks have to raise provisioning for the existing stock of restructured assets to 5 per cent in a phased manner over three years from the

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Raw material security a challenge

Raw material security a challenge

While IndiaÂ’s infrastructure investment is likely to provide a boost to steel demand over the long term, there could be challenges to the raw material availability. Iron ore related uncertainties could be sorted out in the medium to long term,

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Bank credit to infra projects may suffer under Basel III

Bank credit to infra projects may suffer under Basel III

A recent report by ratings agency Icra said bank credit to infrastructure sector may be affected by the norms of the Basel- III regulation. Credit to infrastructure is long-term in nature, while the deposits of banks is short-term to medium-term. This raises asset-liability mismatch. According to the Basel-III norms, banks must maintain a strict net stable funding ratio (NSFR), which is designed to ensure that long-term assets are funded with

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Cost escalation ruins infra firms' hope

Cost escalation ruins infra firms' hope

The rising finance cost has eaten into the profit margins of major infrastructure firms in the first half of the current fiscal year. Infrastructure companies have witnessed a sharp increase in their finance cost during April-September 2012. An analysis of the financial statements of 16 infrastructure firms shows financial cost going up because of huge debt, tight monetary policy and high risk perception.

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