IECD No. 18 /08.12.01/2001-02

April 9, 2002

The Chairmen / Chief Executives of
All Commercial Banks,

Dear Sir,

Financing for construction industry

As banks are aware, the ceiling in regard to grant of credit to construction companies prescribed in terms of our circular IECD No. 2/08.10.01/95-96 dated 25^th July 1995 was withdrawn by issue of our circular IECD No.15/08.12.01/97-98 dated 4^th November 1997. Presently, therefore, there is no ceiling in respect of fund-based and non-fund based limits which can be sanctioned by banks to a construction company. The representatives of construction industry have, however, brought to our notice that there is a need to increase lending to this sector. Keeping this in view and also the importance of construction industry in the promotion of overall economic development, you may, subject to our prudential norms and your own internal guidelines which may be evolved if not already done, consider sympathetically requests from construction companies for sanction of credit facilities.

Yours faithfully,

(K.Vijayaragavan)
Chief General Manager