Chandigarh October 16: Haryana Cabinet which met under the Chairmanship of Chief Minister, Mr Manohar Lal here today accorded ex-post facto approval for providing State Government guarantee of Rs. 700 crore in favour of Commercial Banks for working capital facilities sanctioned to Dakshin Haryana Bijli Vitran Nigam Ltd. (DHBVNL).

The Nigam manages its day-to-day operations by using fund based and non fund based working capital limits sanctioned by various banks. Due to increase in the power purchase payments and enhanced requirement of Letters of Credit (LC) in favour of power suppliers as per Ministry of Power guidelines, DHBVN's existing working capital arrangements were not sufficient to meet with the increased power supply obligations.

The Allahabad Bank (now Indian Bank), Central Bank of India and Bank of Baroda have agreed to consider DHBVN's request for sanction of fresh working capital facilities or increase in existing limits and also reduction of interest rates on total exposure on providing State Government guarantee. After reduction of interest on existing working capital facilities and sanction of fresh limits at reduced rates, the DHBVN will approximately save Rs. 10 crore per annum on account of interest besides meeting the obligations of providing enhanced Letters of Credit (LC) in favour of power suppliers as per Ministry of Power (MoP) guidelines.