Relief to banks as RBI eases infra loan provision norms

The RBI, under governor Sanjay Malhotra, has taken multiple steps since Jan to stimulate credit demand

- Gopika Gopakumar

The Reserve Bank of India (RBI) on Thursday relaxed the provisioning norms for project finance loans, following appeals by lenders.

The RBI, in its final guidelines, has mandated that banks set aside only 1% of standard asset provisioning for projects under construction. It has, however, retained the provisioning requirement for operational projects at 0.4%. The provisioning requirement for loans for under-construction commercial real estate will be slightly higher at 1.25%.

The new norms come into effect from October.