To channelise liquidity into the power sector, a proposal is being mooted for increasing the sectoral exposure limit of commercial banks and financial institutions to the power sector to 20 per cent.The proposal is being discussed by high level committee on financing infrastructure headed by Deepak Parekh.Currently, according to Reserve Bank of India guidelines, the exposure ceiling limits of commercial banks to the power sector are 15 per cent of capital funds in case of a single borrower and 40 per cent for a borrower group.“The Finance Ministry representative has suggested to make a recommendation for increasing the sectoral exposure limit to 20 per cent. He underlined the need for making adequate provisions for mitigating investors’ risks to augment investment in power sector,” said a top official of a financial institution, who was present at the committee discussions on January 28.

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