Draft infra lending norms put NBFCs in a fix

THE RESERVE BANK of India’s draft guidelines for risk weights in infrastructure lending have put non-banking financial companies (NBFCs) in a fix.

- KSHIPRA PETKAR

Most believe that the proposed framework is more complicated than current rules and could be difficult to implement.

The draft introduces a split risk weight structure of 50% and 75% for high-quality infrastructure projects, replacing the existing flat 50% applicable to commissioned projects with over one year of commercial operations.

Lenders say the new criteria — based on repayment levels and other conditions — add layers of complexity which are not present in the current framework. The guidelines will come into effect from April 1.