PFC examining RBI's draft norms on project financing, sees no impact on profitability
Power Finance Corporation (PFC), the country's largest lender to the power sector, said the Reserve Bank's recent draft guidelines on infrastructure project financing will not impact its profitability.
The company said it has sufficient capital adequacy to counter the provision if it gets implemented.
«We are examining those guidelines in detail, but what we understand is that these guidelines have been issued for the projects under implementation. I would like to say that in such a case, we are not going to have any impact on the profitability,» said Parminder Chopra, chairperson and MD of Power Finance Corp.
«We have a very comfortable capital adequacy of about 25% as against RBI's minimum requirement of 15% and our tier one capital is also more than 50% as against capital guidelines of RBI. So, we are not expecting any major impact of those guidelines,» she added.
A recent draft proposal by the central bank said that lenders should set aside a 5% provision of the loan amount that is sanctioned for projects at the construction phase.
On Wednesday, the company reported an 18.4% year-on-year jump in net profit at ₹4,135 crore for the March quarter.
The company said asset quality during the quarter improved and net non-performing assets (NPAs) came down to 0.85% and gross NPAs down to 3.34%. In the December quarter, net NPAs were at 0.9% and gross NPAs at 3.52%.
For the full financial year, the company reported a 25% increase in its net profit at ₹26,461 crore, compared to ₹21,179 crore in FY23.
PFC's balance
