<p>Public sector banks may take a hit of Rs 96,484 crore due to cancellation of coal blocks to power projects, Minister of State for Finance Jayant Sinha said today.<br /><br /></p>.<p>The Supreme Court had in September cancelled allocation of 204 coal mines since 1993 to power plants and other user industries after finding their allotment irregular.<br /><br />Banks have extended credit to power plants built based on coal supply from some of the mines cancelled by the apex court.<br /><br />"The impact of cancellation of coal block allotment on public sector banks due to likely stoppage of production of power plants is estimated at Rs 96,484 crore," Sinha said in a written reply to a question in the Rajya Sabha.<br /><br />He, however, did not say if all the Rs 96,484 crore loan by banks to the projects may turn into bad debt if mining is stopped.<br /><br />The Supreme Court had allowed companies to continue mining till March 31 in blocks where coal production had already started.<br /><br />"As per the information collected from public sector banks, the exposure of all PSBs to the power sector is Rs 5,82,469 crore," Sinha said.<br /><br />The government had last month promulgated an Ordinance for auctioning the 204 coal blocks whose allocation was cancelled by the Supreme Court. In that Ordinance, a provision was added for allowing commercial mining of coal by private companies.<br /><br />The first lot of 74 mines will be auctioned to specific end-users in in early February.</p>
<p>Public sector banks may take a hit of Rs 96,484 crore due to cancellation of coal blocks to power projects, Minister of State for Finance Jayant Sinha said today.<br /><br /></p>.<p>The Supreme Court had in September cancelled allocation of 204 coal mines since 1993 to power plants and other user industries after finding their allotment irregular.<br /><br />Banks have extended credit to power plants built based on coal supply from some of the mines cancelled by the apex court.<br /><br />"The impact of cancellation of coal block allotment on public sector banks due to likely stoppage of production of power plants is estimated at Rs 96,484 crore," Sinha said in a written reply to a question in the Rajya Sabha.<br /><br />He, however, did not say if all the Rs 96,484 crore loan by banks to the projects may turn into bad debt if mining is stopped.<br /><br />The Supreme Court had allowed companies to continue mining till March 31 in blocks where coal production had already started.<br /><br />"As per the information collected from public sector banks, the exposure of all PSBs to the power sector is Rs 5,82,469 crore," Sinha said.<br /><br />The government had last month promulgated an Ordinance for auctioning the 204 coal blocks whose allocation was cancelled by the Supreme Court. In that Ordinance, a provision was added for allowing commercial mining of coal by private companies.<br /><br />The first lot of 74 mines will be auctioned to specific end-users in in early February.</p>