SBI questions veracity of Andhra Pradesh government’s guarantees
HYDERABAD: State Bank of IndiaNSE 0.28 % (SBI) has questioned the veracity of guarantees the YS Jaganmohan Reddy-led Andhra Pradesh government has offered to raise funds for its power sector after the post-election renegotiation of several purchase deals cleared by his predecessor N Chandrababu Naidu.
In a letter dated September 30, SBI has also raised concerns about the state’s rising outstanding debt and sovereign guarantees. The bank was responding to an application for a Rs 3,000-crore term loan by the Andhra Pradesh Power Finance CorporationNSE 1.00 % (APPFCL).
In its letter, SBI sought the response of the APPFCL managing director on the “veracity of the guarantee of the government of AP in the context of each succeeding state government not honouring the commitments made by the previous governments”.
