Archive · 21 Jun 2025
RBI Eases Project Financing Rules for Banks and NBFCs
The Reserve Bank of India (RBI) has made it easier for banks and NBFCs (companies that lend money) to finance big projects.
A new report says this change won't really affect how much money they make.
The RBI changed the rules about how much money banks have to set aside for projects.
These new rules start in October.
The RBI got suggestions from many different groups before making these changes.
RBI eased project financing norms for banks and NBFCs.
Report suggests negligible impact on profitability and balance sheets.
New guidelines include reduced provisioning requirements.
Revised norms will come into effect from October 1st.
RBI received feedback from about 70 entities.
- Who
- The Reserve Bank of India (RBI)
- What
- RBI eased project financing norms for banks and NBFCs.
- When
- The new guidelines will come into effect from October 1st of the current year.
- Where
- India
- Why
- To provide a comprehensive framework for income recognition, asset classification, and provisioning norms for project loans under implementation.
Motilal Oswal Report
RBI and Banks/NBFCs
Profitability and Cost
Motilal Oswal Report
The impact of the revised norms on bank/NBFC profitability will be negligible.
RBI and Banks/NBFCs
For new project loans, any incremental provisioning cost is likely to be passed on to borrowers, especially in a declining rate environment, through yield adjustments.
- Impact on Profitability
- Negligible
- Effective Date
- October 1st
- Provisioning during construction
- 1%
- Provisioning post-DCCO
- 0.4%
- Entities Providing Feedback
- Around 70
