When asked if the infra sector funding, critical for economic progress, is "untouchable for banks now", he singled out the power sector saying, "nobody wants to touch that".
Making it clear that banks are open to lending to all the sectors till the risks are hedged properly, he said there are problems relating to the fuel supply pacts and power purchase agreements.
Khara said bankers are open to funding road projects, and credited to the National Highways Authority which structures these projects.
Fellow managing director PK Gupta said in the case of the power sector, the February 12 circular revamping the NPA recognition norms, has made the going difficult for banks because of the stipulation of quicker recognition of an asset as an NPA and its immediate referral to insolvency courts.
Gupta also said a referral to NCLT will naturally lead to the annulment of PPAs, which unnerves bankers.
SBI, which has around Rs 270 billion exposure to these troubled accounts, has assessed 11 power assets and has found four of them not resolvable, while the rest seven can be resolved, he said.
Gupta further said banks have 15 days after the 180- day deadline to resolve them ended August 27. If banks are not able to iron out resolution plans, some of the seven may also have to go to the NCLTs.
He, however, said the February 12 circular will not have a significant impact on SBI as it has already recognised a majority of these are NPAs and has provided accordingly.
"The amount of incremental provisioning that we may have to make is not very substantial as most of these assets are anyways NPAs and adequately provided for," he said. Also, the full and immediate provisioning does not cover these accounts, which means that banks can stagger the loss coverage over a year.
According to a recent Icra report, after the August 27 deadline, banks will have to set aside around Rs 1 trillion in additional provisions for around 70 accounts in the power, EPC and telecom sectors worth around Rs 3.8 trillion.
Gupta said in an ideal case, if a bank is given more time, it will be able to get a resolution plan for the asset without going to NCLTs.
When asked as to when the bank will return to profitability, he said resolution of a few big assets is underway and as and when it happens, it will be able to turn back into the black.
Meanwhile, Gupta said apart from the roads sector, there is no demand for large credit from any other corporate sector now.
He said retail continues to drive the loan demand and has been growing at 14-15 per cent for the bank. He also exuded confidence that the bank will be able to meet the 10 per cent credit growth target for the fiscal.
On the travails in the infra sector, Khara said generally, over 25 years are required for a project to mature and SBI's experience in the sector is only 10-years old.
It can be noted that a bulk of the 11.6 per cent NPAs for the system have come from the infrastructure sector. Long-term financing alternatives beyond bank lending have already evolved and both RBI and government are cajoling the players to avail of the same.