Banks are slow and cautious while lending to road developers whereas the Union government is very keen on expediting road projects on a priority basis to revive growth. In the first half of the current financial year, banks have lent a total of Rs 550 crore to only five road projects.
Between April and September, about 26 road project developers had applied for bank loans.These projects entailed an estimated investment of Rs 27,482 crore and involved a sanctioned loan component of Rs 5,422 crore.
In fact, several banks have virtually stopped lending to projects where developers fail to bring 50 per cent equity capital upfront, do not have 100 per cent of the required land in possession or have not obtained environmental and other clearances.