Tighter rules for project finance proposed
Business Standard|May 04, 2024
The Reserve Bank of India (RBI) on Friday proposed to set a floor for banks' loan exposure for project finance for consortium lending and mandated 5 per cent standard asset in the construction phase.
MANOJIT SAHA

The central bank, in the draft guidelines on the financing of project loans, said, "In projects financed under consortium arrangements, where the aggregate exposure of the participant lenders to the project is up to ₹1,500 crores, no individual lender shall have an exposure which is less than 10 per cent of the aggregate exposure".

For projects where the aggregate exposure of lenders is more than 1,500 crores, this individual exposure floor shall be 5 per cent or ₹150 crore, whichever is higher, it said.

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