ICICI Bank said on Thursday it would wait for the government to remove the cloud of uncertainty surrounding special economic zones before deciding on lending to such projects.
The bank will wait 'for the present uncertainty to settle down and for greater clarity to emerge,' its CEO and managing director K V Kamath told reporters on the sidelines of the FICCI-IBA global banking conference in Mumbai.
His comments come in the wake of the wrangle within the government on whether proliferation of SEZs were a boon or a bane.
Compounding the confusion, the Reserve Bank last week directed banks to treat loans to such zones on par with lending to real estate sector -- a decision aimed at limiting the exposure of commercial banks to SEZs.
The decision prompted Commerce Minister Kamal Nath to criticise the central bank for what he said was an 'inconsistent approach' towards SEZs.
He had pointed out that RBI had in its annual report applauded the SEZ scheme for accelerating economic development.
"The RBI in its report had itself termed SEZs as engine of growth...," said Nath, whose ministry is of the view that such zones would stimulate investments and earn Rs 44,000 crore (Rs 440 billion) in revenues for the government in a year.
But finance ministry estimates suggest that SEZs could lead to a revenue loss of Rs 1,75,000 crore (Rs 1,750 billion) in direct taxes, customs and excise duties over the next five years.
The IMF too had cautioned India to have a second look at the SEZ policy, saying it could lead to uneven development.
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