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AIBEA urges RBI to revoke lending restrictions on Dena Bank

The All India Bank Employees Association (AIBEA) has urged RBI governor Urjit Patel to revoke lending restrictions on Dena Bank, claiming the move will deteriorate its financial health further.

In view of high non-performing assets (NPAs), the Reserve Bank of India (RBI) last month had initiated prompt corrective action (PCA) against Dena Bank, restricting the lender from giving fresh credit and conducting new hirings.

“We regret that RBI has made a virtual embargo on any lending in Dena Bank. Chocking the bank’s lending operations will further deteriorate its health,” AIBEA general secretary CH Venkatachalam said in a letter dated June 10 addressed to the RBI governor.

“The step has created undue panic in the minds of the bank’s customers and employees,” he added.

The letter said Dena Bank, though not a very big bank in terms of size and business volume, has been playing a very effective role in economic development especially in the main geographical areas of its operations.

“We urge upon you to re-examine and rescind this embargo,” the letter read.

Gross NPAs of the bank hit a high of 22.4 per cent of the gross advances as on March 31, 2018, from 16.27 per cent as on March 31, 2017.

In value terms, the gross NPAs or bad loans rose to Rs 16,361.44 crore from Rs 12,618.73 crore.

Net NPAs were also up at 11.95 per cent (Rs 7,838.78 crore) from 10.66 per cent (Rs 7,735.12 crore).

The RBI tightened its PCA framework last April to turn around lenders with weak financial metrics, and since then 11 banks have been moved to PCA, which involves curbs such as stopping branch expansion, halting dividend payments, limiting loan limits, among others.

Besides Dena Bank, other lenders in the RBI’s watchlist are Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, UCO Bank, Bank of India, Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce and Bank of Maharashtra.

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Tata Power gets 150 megawatt-solar project in Maharashtra

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Tata Power’s subsidiary Tata Power NSE has won a 150 mw-solar PV project on the long-term basis in Maharashtra, the company said in a statement Monday.

This month, MSEDCL re-introduced the tender, inserting a clause that allows winning bidders to revise tariffs and recover any safeguard duty that might be introduced later.

This project is a part of Maharashtra State Electricity Distribution Co’s 1,000-mw grid-connected solar power projects for which had called for bids for a period of 25 years. Tata Power will now sign a power purchase agreement with MSEDCL.

The minimum project capacity is 5MW for intra-state and 50MW for inter-state projects. The last date for submission of technical bids is 27 April. Financial bids open on 7 May.

“TPREL is working towards Tata Power group’s renewable energy portfolio and achieve 30-40% generation capacity through clean energy sources. To achieve this goal, we are evaluating clean and green energy projects which are in line with our core business value of sustainable growth and returns to the shareholders and will further enhance and increase our clean energy footprint,” said Ashish Khanna, president-renewables, Tata Power.

Tata Power aims to have 35-40% of its generation capacity from non-fossil fuel sources by 2025. Currently, it has a renewable energy capacity of over 2,000 mw and green generation portfolio (consisting of solar, wind, waste heat recovery and hydro) of over 3,400 mw.

Mudit Jain, senior manager at renewable energy consultant Bridge to India said while the state has not indicated where it wants the projects set up, existing projects in Maharashtra are focused in the Marathwada, Vidarbha, Wardha and Osmanabad regions, where solar irradiance is the highest. Maharashtra currently has 430MW of installed solar capacity.

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