India's finance ministry intervenes in power project loans

India's Finance Ministry is intervening in power project loans after disbursements failed to materialize.

Union Finance Minister, Pranab Mukherjee, noted that over Rs 1,74,000 crore are caught up in these projects. He
expressed concern over the high exposure of public sector banks to these large projects, which may loosely be defined as those projects that have secured a loan of Rs 100 crore or more from individual banks.

With power projects left wanting for coal and are grappling with skyrocketing prices, loan defaults are becoming rampant. On the other hand, banks that have huge exposure in the power sector are also struggling to get a hold of their investments and are choosing to stay away from the power sector.