According to norms, Indian banks have to lend 40% of their net bank credit to sectors such as agriculture, small enterprises, renewable energy, export, education, and weaker sections.
New Delhi : The railway ministry has sought that banks categorise funds availed by companies to redevelop stations as priority sector loans, as such a move would enable developers to secure cheaper funding, sources told Cogencis. In a letter to the finance ministry during the tenure of Suresh Prabhu, the predecessor to incumbent Railway Minister Piyush Goyal, the railways had sought priority sector loan status for its project aimed at increasing passenger amenities. Such a move would mean station redevelopers will get loans from banks at rates much lower than those offered by banks to all commercial borrowers. “The developers will get funds cheaper and the eventual benefits will fall on to the passengers,” the source said.
According to norms, Indian banks have to lend 40% of their net bank credit to sectors such as agriculture, small enterprises, renewable energy, export, education, and weaker sections of the society. Companies from Canada, China and Malaysia, along with domestic conglomerates, have evinced interest in Indian Railways’ plans to redevelop 400 railway stations, contracts for which will be offered through a bidding process by 2018.
The winners will get railway land around the stations on a 45-year lease and can build malls, parking zones, cafes, hotels and commercial office complex.