RBI’s New Project Finance Norms Offer Relief to NBFCs:
The Reserve Bank of India (RBI) has released its final guidelines for project finance lending, introducing a more lenient framework for provisioning norms and offering relief to key non-banking financial companies (NBFCs) like PFC and REC. These norms, applicable from October 1, 2025, are expected to enable smoother transitions for long-term infrastructure financing while safeguarding financial stability.
RBI Guidelines :
- Effective Date: Applicable to loans sanctioned on or after October 1, 2025.
For under-construction projects:
- 1% standard provisioning
- 1.25% for Commercial Real Estate (CRE).
Once operational:
- 0.4% for general project finance.
- 0.75% for CRE-Residential Housing.
- 1% for CRE projects.
- No Retrospective Application: Existing loans that have achieved financial closure are exempt from the new norms.
Flexibility on Project Delays
- Up to 3 years allowed for infrastructure projects.
- Up to 2 years for non-infrastructure projects.
- Additional Provisioning required for delay deferments but reversed after commencement.
