US EditionRBI Issues Project Finance Directions, Banks to Provide 1-1.25% for Projects Under Construction
- The Reserve Bank of India issued Project Finance Directions, 2025, providing a framework for financing projects by banks and other entities based on a review of existing regulations and risks.
- The guidelines introduce a principle-based regime for stress resolution in project finance and set limits on extensions of the date of commencement of commercial operations.
- Lenders must maintain general provisions of 1-1.25% on projects during construction, significantly lower than the previously proposed provisions, and have to monitor project performance continuously.
- These directions will take effect on October 1, 2025, as stated by the Reserve Bank of India.
11 Articles
11 Articles
RBI's project finance norms, effective October 1, require banks to maintain provision of 1-1.25% in construction phase
The norms will come into force with effect from October 01, 2025, RBI said . In February, RBI Governor Sanjay Malhotra had said that project financing norms will get deferred by a year and are not to going be implemented before March 31, 2026.
PFC, REC well-placed under new RBI norms; Motilal Oswal reiterates buy rating
RBIs final project finance guidelines offer relief to NBFCs by softening provisioning norms and avoiding retrospective application. The changes promote financial stability while enabling smoother implementation and continued infrastructure financing support with minimal disruption to balance sheets.
RBI’s Updated Project Finance Norms to Take Effect from 1 October 2025
In June 2025, the Reserve Bank of India (RBI) introduced the ‘RBI (Project Finance) Directions, 2025’, applicable to banks, Non-Banking Financial Companies (NBFCs), cooperative banks, and all other regulated entities. These directions, set to come into effect from 1 October 2025, are aimed at enhancing the flow of credit to project finance while ensuring financial […] The post RBI’s Updated Project Finance Norms to Take Effect from 1 October 202…
RBI Issues the Reserve Bank of India (Project Finance) Directions, 2025
RBI Issues the Reserve Bank of India (Project Finance) Directions, 2025 The Reserve Bank of India stated in its press release dated June 19, 2025, that it had issued draft guidelines on ‘Prudential Framework for Income Recognition, Asset Classification and Provisioning pertaining to Advances Projects Under Implementation’ on May 3, 2024, in order to gain […]
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