Financing shipbuilding: Sitharaman asks lenders to have a proactive approach

Mumbai: “I will personally sit with banks, public sector banks first, then private sector banks and then foreign banks too, to understand where the glitches are? Why can’t they come forward to support/ finance shipbuilding? What are risks they are thinking. We will discuss risk factors and risk analysis that’s for sure”, said Finance Minister Nirmala Sitharaman to much relief of shipyards in India.

Finance Minister was addressing a session on ‘Maritime financing, insurance and arbitration’ on the 3rd and final day of Global Maritime India Summit (GMIS 2023) in Mumbai.

On the need to improve financing to the maritime sector, she admitted that despite having a strong balance sheet, banks are not very enthused about funding this sector, largely due to higher risks this sector is associated with.

Sitharaman said she will separately talk to the public sector banks, understand the glitches and ask them to have a more positive approach to this sector. "I also want private sector lenders to look at shipping and maritime sectors more proactively," she said.

Self-financing

Sitharaman further said the operators should also look at fundraising on their own by asset monetisation.

In fact, nine of the 12 government ports have identified 35 projects for monetisation and if all goes well Rs 14,483 crore worth of projects can be monetised, as part of the national asset monetisation pipeline.

Developing legal systems for arbitration

Finance Minister also called for developing capabilities and legal systems, so that the country can have an international arbitration centre for the maritime sector.

"While there are many Indians working in international arbitration centres in London or Singapore or Dubai, they are all just helping the senior lawyers there there and not leading a case", Sitharaman said.

This needs to change and can change, she added. But there is a need to improve and strengthen our arbitration processes and laws so that they meet global standards, the minister said, adding that 'when we have developed a system for this we can also have an arbitration centre'.

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