PRESS RELEASE
RESERVE BANK OF INDIA
Website : www.rbi.org.in Department of Communication, Central Office, Shahid Bhagat Singh Marg, Fort,
email : helpdoc@rbi.org.in Mumbai – 400 001 /Phone: 022 – 2266 0502
RBI Issues the Reserve Bank of India (Project Finance) Directions, 2025
The Reserve Bank had issued draft guidelines on ‘Prudential Framework for
Income Recognition, Asset Classification and Provisioning pertaining to Advances –
Projects Under Implementation’ on May 03, 2024, for stakeholder comments. The
draft guidelines proposed an enabling framework for the regulated entities (REs) for
financing project loans, while addressing the underlying risks.
- As part of the stakeholder consultation exercise, inputs / feedback were received
from around 70 entities including banks, NBFCs, industry associations,
academicians, law firms, individuals and the Central Government. The inputs/
feedback received have been examined and suitably incorporated while formalising
the final Directions, which have been issued by the Reserve Bank today. The
Directions entail inter alia the following:
- Adoption of a principle-based regime for resolution of stress in project finance
exposures, harmonised across REs. - Rationalization of permissible ‘date of commencement of commercial
operations’ (DCCO) extensions with an overall ceiling of three and two years
for infrastructure and non-infrastructure sectors, respectively. - Flexibility to REs in extending the DCCO within the above ceilings, based on
their commercial assessments. - Rationalisation of standard asset provisioning requirement to 1% for projects
under construction, which shall gradually increase for each quarter of DCCO
deferment. The requirements for under construction CRE exposures will be
however, slightly higher at 1.25%. - Under construction projects where financial closure has already been
achieved shall continue to be guided by the extant provisioning norms to
facilitate a seamless implementation. - During operational phase, the standard asset provisioning requirement shall
stand reduced to 1% for CRE, 0.75% for CRE-RH and 0.40% for other project
exposures, respectively.
The Reserve Bank of India (Project Finance) Directions, 2025 shall come into
force with effect from October 1, 2025.