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Banking industry looking for SEZs to boost credit

Written by: Staff

New Delhi, May 1 (UNI) Notwithstanding the tight liquidity situation and the emerging sellers' market, the banking industry is looking for its next wave of credit growth from special economic zones (SEZs).

More than 50 per cent of the non-farm credit would be directed towards these zones.

''Once activities get started at the proposed SEZs, credit demand and disbursement would see an impressive growth,'' official sources said today.

As many as 117 SEZs have been given in-principle approval, of which 86 are sector specific and 28 multi-product zones.

In the last fiscal, a major chunk of credit demand came in from steel and textile sectors. The coming years will see the two sectors continuing to garner sizeable demand for credit.

''The banking industry is likely to require about Rs 60,000 crore in the next five years to sustain the credit growth,'' according to estimates.

Sources said the rapid development of the infrastructure sector would also be an important source of demand for credit.

They said banks would need to explore the option of raising money using the route of Tier II capital by issuing bonds.


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