Centre nudges banks to push infra lending, fuel economy

The govt is keen to ensure that financing constraints don't delay viable infra projects

- Subhash Narayan & Rhik Kundu

The Centre has urged banks and financial institutions to accelerate lending for infrastructure projects in order to sustain economic growth momentum, as credit growth shows signs of tapering, two people aware of the matter said.

In recent meetings with top executives of lenders, finance ministry officials advised lenders not to hold back funding for viable infrastructure projects, particularly those with shorter gestation periods and quicker commissioning timelines, so long as they comply with the Reserve Bank of India (Project Finance) Directions, 2025, the people said.

The Reserve Bank of India's (RBI's) new guidelines, effective from 1 October 2025, require strict adherence to project fundamentals, including financial closure, appointed date, date of commercial operations and all key statutory clearances such as land acquisition and right of way.

"As long as projects meet the RBI's 2025 guidelines, covering financial closure, statutory clearances and execution timelines, there's no reason for financing to slow down," said the first of the two persons mentioned above, on the condition of anonymity.