RBI Proposes Higher Provisioning Norms for Project Loans and Real Estate

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The Reserve Bank of India (RBI) has introduced regulations outlining enhanced provisions for project loans, covering both infrastructure and non-infrastructure projects, as well as loans in the real estate sector. This marks a significant increase from the current provision of 0.4% for non-default exposures. The proposed provisions are intended to be applicable to all types of lenders, including banks and non-banking financial companies (NBFCs). As per the draft regulations, a 5% general provision requirement is suggested for all existing and new project loans during the construction phase, prior to the date of commencement of commercial operations (DCCO).

Note: The above-mentioned news was first published by us in our ProjectX India | 1st June 2024 edition.. Do you want to buy this issue or our latest issue? If yes! click here

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