Punjab National Bank, IL&FS sign MoU for industrial infrastructure projects

Mumbai: Punjab National Bank has entered into a memorandum of understanding (MoU) with IL&FS Cluster Development Initiative Ltd for financing of industrial infrastructure projects.

Under the MoU, the bank would finance industrial infrastructure projects, including common infrastructure facilities like effluent treatment plants, hazardous waste disposal, water supply, greenfield industrial parks, upgradation of existing industrial estates, quality control labs, design centres etc, covering various manufacturing sectors, Punjab National Bank chairman KC Chakrabarty said.

PNB, he said, has earmarked around Rs2,500 crore for such projects, adding, these projects are expected to yield 1,00,000 jobs over the next five years.

Apart from the common facilities or industrial park infrastructure, the bank will also finance the various SME units coming up in these industrial parks for their various credit needs.

The bank will also offer loans for fixed assets, apart from working capital loans for their operational needs. All financial needs of the various industrial units will be met by the bank.

Nearly 45 per cent of the total contribution to manufacturing comes from small and medium units and the cluster development initiative of IL&FS is expected to meet the various needs of the industrial clusters.

IL&FS will be responsible for sourcing of the projects, project structuring, project development, engineering and procurement, project management and supervision, due diligence and project monitoring.

PNB, meanwhile, has no immediate plan to increase deposit rates despite an erosion in its deposits with rising inflation, Chakrabarty said.

However, there is some pressure on the margin because of increase in cash reserve ratio (CRR), the percentage of deposits which commercial banks have to keep with the Reserve Bank of India.

He said the interest rates were still higher than the inflation and there was incentive for the depositors.