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• Power sector companies have approached Bank of Maharashtra for restructuring the loan given to them. Speaking to CNBC-TV18, S Bhatacharya, chairman and managing director at Bank of Maharashtra says that there is no delinquency till date and the bank doesn't really have a problem with the power sector on the whole since it is covered under government guarantee."There is no trouble as far as power generation and transmission companies are concerned; however, power distribution companies have approached us for refreshment of their loans for a longer tenure with no sacrifice," he says. The bank plans to restructure nearly Rs 1600 crore worth of loans by March 2012. The provision coverage ratio stands at 90% as on December 2011 for the bank.Bhatacharya expects capital infusion of Rs 860 crore by March and projects credit growth at 17% by March 2012.

• Q: Your exposure to the power sector itself is something like over 13% and within that you have had to restructure some of the SEB loans (Haryana SEB). Can you take us through the overall exposure figure to SEBs and how much have you had to restructure?

• A: The power sector as a whole doesn't pose any problem for my bank. Our finances are mostly covered under government guarantee. As of date, there is no delinquency. Total exposure to the power sector is to the extent of Rs 8600 crore of which Rs 2600 crore comes under distribution, Rs 2000 crore comes under transmission and the remaining Rs 4000 crore comes under power generation.There is no problem so far as power generation is concerned or transmission is concerned. But power distribution companies have approached us for refreshment of their loans for a longer tenure with no sacrifice. We have also put some conditions to them that all these accounts should be brought under ESCO mechanism (pay after saving), under concessional financing and the government guarantees would be there.Out of this Rs 2680 crore exposure, as of date, I have got proposal from Uttar Haryana distribution companies to the extent of Rs 150 crore and Rajasthan distribution companies from four companies to the extent of Rs 1100 crore and UP distribution companies to the extent of Rs 400 crore. That means Rs 1600 crore is to be restructured may be by March 2012.

• Q: At least for those Rs 1600 crore, your provisioning will have to go up to 2%?

• A: Yes, from 0.4% it will go up to 2%, and this will impact profitability to the extent of Rs 25 crore.

• Q: No other provisioning needs to be done because of sacrifice of the net present value (NPV)?

• A: They are raising the rate of interest. So this NPV will not be disturbed and there will be no sacrifice on that particular sector.

• Q: What about the remaining Rs 1000 crore to the SEB? Do you expect that sometime in FY13 that they will also have to be restructured? Which are those distribution companies?

• A: As of date, we have spoken to Punjab state government; we have an exposure of Rs 700 crore and they have told that they are not going to restructure. Maharashtra distribution company to which we are having an exposure of Rs 400 crore, they are also not going for any restructuring as of date. But in future, in 2013, what will happen cannot be told right now. As of date Maharashtra and Punjab distribution companies are profit making, so they are not coming with any proposal for restructuring.

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