• Feedback
  • RSS Feed
  • Sitemap
Ommcom News
  • Home
  • Odisha
  • Nation
  • World
  • Sports
  • Business
  • Entertainment
  • Videos
  • Science & Tech
  • Photo Gallery
  • ଓଡ଼ିଆରେ ପଢନ୍ତୁ
No Result
View All Result
  • Home
  • Odisha
  • Nation
  • World
  • Sports
  • Business
  • Entertainment
  • Videos
  • Science & Tech
  • Photo Gallery
  • ଓଡ଼ିଆରେ ପଢନ୍ତୁ
No Result
View All Result
Odisha News, Odisha Breaking News, Odisha Latest News || Ommcom News
Home Business

RBI’s New Project Finance Directions To Cushion Banks Against Risk: Report

OMMCOM NEWS by OMMCOM NEWS
June 26, 2025
in Business
RBI

Mumbai: The Reserve Bank of India’s (RBI) final directions on project financing will help strengthen the guardrails against risk in project financing and harmonise the relevant and extant regulations across regulated entities, according to a Crisil report released on Thursday.

The final directions, released on June 19, come into effect from October 1.

Crisil Ratings Director Subha Sri Narayanan said: “Compared with the draft of May 2024, the final directions improve the ease in doing business for lenders. The provisioning requirements are significantly lower, not only in the case of under-construction projects but also for operational projects.”

Additionally, the guidelines are applicable only on a prospective basis. As a result, the impact on credit costs would be well below what was envisaged earlier. The removal of the proposed six-month limit on the moratorium period after the date of commencement of commercial operations (DCCO) will also benefit lenders, allowing them to continue to structure loans in line with the expected cash flows of projects.

Further, there are some changes, compared with the extant regulations, which will bolster the overall risk management of project financing, according to the Crisil report.

The introduction of limits on the number of lenders and the individual exposure size for projects financed by a consortium would ensure each lender has a higher stake and hence is more proactive in due diligence, credit appraisal and risk underwriting during the loan tenure. Further, it will enable more efficient decision-making given the lower number of stakeholders and greater alignment of interests.

The new direction brings in a higher base level standard asset provisioning for under-construction projects set at 1 per cent and a slightly higher 1.25 per cent for under-construction CRE exposures (that compares with the extant 0.4 per cent to 1.0 per cent), with step-ups linked to DCCO deferment period.

This higher base level provisioning will bring in a differentiation between provisioning for under-construction and operational projects to address the inherently higher risk in the former. It also now guides lenders to step up their provisioning cushion aligned to the number of quarters for which the DCCO has been extended, in case the risk characteristics of a funded project change, the report states.

More stringent conditions on permitted cumulative DCCO deferment to maintain ‘Standard’ asset classification reduced to up to 3 years for infrastructure projects, irrespective of reason. For non-infrastructure projects, this has been retained at two years.

This could pose a challenge for lenders in cases of long-drawn litigation, but allows earlier recognition of stress and adoption of necessary steps to address the same, albeit with higher provisioning, the report added.

(IANS)

ShareTweetSendSharePinShareSend
Previous Post

Rahul Gandhi’s Demand For Digital Voter List Legally Untenable: Experts

Next Post

Stop Clock For Tests, New DRS Protocols Amongst Notable Rule Changes By ICC

Related Posts

Business

‘Festive Booster’: Centre Releases Tax Devolution Of Rs 1,01,603 Crore To State Govts

October 1, 2025
RBI
Business

RBI’s Move To Hold Repo Rate At 5.5 Per Cent Prudent Amid Global Uncertainty: Economist

October 1, 2025
Business

RBI Policy Statement An Authoritative One Towards Market Reforms: SBI Chairman

October 1, 2025
RBI Governor Sanjay Malhotra
Business

RBI MPC Keeps Rates Steady, Raises GDP Projection, Trims Inflation Forecast

October 1, 2025
Business

GST Revenues Up 9.1 Pc At Rs 1.89 Lakh Crore In Sep

October 1, 2025
Stock Markets
Business

RBI MPC Decisions Break 8-Day Losing Streak, Sensex Surges 715 Points

October 1, 2025
Next Post

Stop Clock For Tests, New DRS Protocols Amongst Notable Rule Changes By ICC

Adani Foundation Joins DMIHER To Establish Global Centre Of Excellence In Affordable Healthcare

‘Objectionable Remarks’: AIMPLB Asks Political Parties To Seek Action Against Justice Shekhar Yadav

Khimji
  • Feedback
  • RSS Feed
  • Sitemap

© 2025 - Ommcom News. All Rights Reserved.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist

No Result
View All Result
  • Home
  • Odisha
  • Nation
  • World
  • Sports
  • Business
  • Entertainment
  • Videos
  • Science & Tech
  • Photo Gallery
  • ଓଡ଼ିଆରେ ପଢନ୍ତୁ

© 2025 - Ommcom News. All Rights Reserved.