And as to why banks cannot make long-term fixed rate infrastructure loans, the stock refrain is that this will create asset liability mismatch in banks’ balance sheets as their liabilities are mostly short-term.
Even then banks have a combined infrastructure loan portfolio of about Rs.6 trillion (US $ 110 bn), representing about 9% of the total bank assets in India of Rs.71 trillion (US $ 1.35 trillion). As against this, corporate bond market is around Rs.9 trillion (US $ 170 bn).