Finance Ministry demanded the Bank details of Coal Mining Firms

In wake of the raging Coal Gate Scam, the Finance Ministry on 18 September 2012 asked for information related to bank loans of the mining companies. The ministry also asked details of companies not directly engaged in mining but collaterally engaged to coal blocks allocated from the public sector banks. The ministry also demanded details related to sanctioned and out-standing fund and non-funds of the companies along with their status of asset classification.

The move of the ministry is a result of irregularities found in allocation of the coal-blocks to the 58 power and iron and steel companies, whose bank guarantees have been invoked by the Ministry of Coal followed by the recommendation made by the inter-ministerial group on coal or the de-allocation of the coal-blocks that is under process.

The need for all these details by the finance ministry is in the wake of the report submitted by the CAG (Comptroller and Auditor General) of India related to non-transparent allocation of coal blocks, which lead to an estimated exchequer loss of Rs 1.86 lakh crore.

RBI’s data related to sectoral deployment of credit states

1. Bank exposure to power sector is Rs 344980 Crore
2. Bank exposure to iron and steel is Rs 36320 Crore
3. Bank exposure to cement and cement products is 36320 Crore
4. Bank exposure to mining and quarrying is Rs 36600 Crore

Power producers in India consume almost 70 percent of the total production of coal in the country.