Quick Summary
The Reserve Bank had issueddraft guidelines on "Prudential Framework for Income Recognition, Asset Classification and Provisioning pertaining to Advances - Projects Under Implementation" on May 03, 2024, for stakeholder comments. The draft guidelines proposed an enabling framework for the regulated
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FAQ :
The Reserve Bank of India (Project Finance) Directions, 2025 shall come into force with effect from October 1, 2025.
The directions aim to provide an enabling framework for regulated entities in financing project loans while addressing underlying risks and establishing a principle-based regime for resolving stress in project finance exposures.
The guidelines rationalise permissible DCCO extensions, with an overall ceiling of three years for infrastructure sectors and two years for non-infrastructure sectors. Regulated entities have flexibility to extend the DCCO within these ceilings based on their commercial assessments.
The standard asset provisioning requirement for projects under construction is rationalised to 1%, gradually increasing for each quarter of DCCO deferment. For under construction CRE exposures, it will be slightly higher at 1.25%.
During the operational phase, the standard asset provisioning requirement is reduced to 1% for CRE, 0.75% for CRE-RH, and 0.40% for other project exposures.
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