Axis Bank monitoring infra exposure

Mumbai: India's No. 3 private lender Axis Bank is closely monitoring its exposure to infrastructure projects, a senior official said, joining other Indian banks who have turned cautious amid a slowdown in the sector.

India has been beset by policy gridlock over the past year as a spree of corruption scandals has put the government on the back foot, slowing reforms. Big-ticket projects have been delayed awaiting environmental clearances or access to coal.

The bank has been selective in its approach to finance infrastructure projects, V. Srinivasan, executive director, corporate banking, told Reuters in an e-mail.

Our exposure to infrastructure is well within prudential levels set up by the bank and exposures are being closely monitored, he said.

Rising interest rates, high inflation and worsening global conditions are also dragging down near-term business sentiment in India.

Last week, the chief executive of India's second biggest lender ICICI Bank said the bank was being selective in lending to real estate and power projects.

Larsen & Toubro, India's biggest engineering conglomerate, is targeting overseas revenue growth as part of a strategy to beat a slowdown in Asia's third-largest economy.

Over the last few months, there has been a slowdown in new project financing requests on account of policy uncertainty and volatility in offshore and local markets, Srinivasan said.

At 11:44 a.m, shares of Axis Bank, valued at $7.66 billion, were trading 2.11 percent higher at 987.65 rupees in a firm Mumbai market.

The bank's shares have dropped more than 28 percent this year. The banking index has fallen 27 percent in 2011.

Source: Financial Express