State Bank Of India is Not Ready To Issue Loan To Andhra Pradesh Electricity Board
State Bank of India shocked Jagan Mohan Reddy govt in granting a loan of Rs. 3000 crore due to the current state of AP's financial status.
State Bank of India shocked Jagan Mohan Reddy govt in granting a loan of Rs. 3000 crore due to the current state of AP's financial status. Despite the state government's assurance, State Bank is not ready to lend. SBI apprehended that how the loan could be repaid by the govt.
AP Power Finance Corporation has recently applied to State Bank for a loan of Rs 3,000 crore. But as the debt burden on the state government continues to rise, the SBI has written a two-page letter to the managing director of APPFCL, expressing doubts over the government's guarantee.
The state government has a total of Rs 2.52 lakh crore for the financial year 2018-19. In its letter, State Bank referred to the Brickwork Report that the debt burden will reach Rs 3 lakh crore by 2020.
As a result of the proposed debt plan, the difference between assets and liabilities increased 714.32 times, and SBI is backing down its lending as profit margins are low. The letter stated that the state bank was giving the Crisil D rating. It will send them to their corporate office if they have any suspicions. The ratio of assets and liabilities should be 1.25: 1, while the power company has 1: 1.