Tuesday, 26 November 2013

RBI Widens Infrastructure Sector Lending Sub-Category

Mumbai: Reserve Bank today widened the definition of infrastructure lending including hotels with project costing more than Rs. 200 crore as well as convention centres with project worth Rs. 300 crore.
"The government has further updated the harmonised master list...the new sub-sectors have been added in the list. Hotels with project cost of more than Rs. 200 crore each in any place in India and of any star rating. Convention centres with project cost of more than Rs. 300 crore each," RBI said in a notification.
RBI said that the new sub-sectors will get classified as 'infrastructure' for the purpose of lending by banks and select All India Term-Lending and Refinancing Institutions from the date of this circular.

Various sub-sectors under the categories such as Transport, Energy, Water & Sanitation, Communication, Social and Commercial RBI Widens Infrastructure come under infrastructure lending.

Hotel and convention centre come under 'Social and Commercial Infrastructure' category for this kind of lending.

The Finance Ministry has favoured relaxation of lending rules for infrastructure projects in order to expedite them.

Also, it has written to the RBI suggesting changes in the rules for infrastructure financing, including the treatment of non-performing loans to the sector.

In January, the government set up the Cabinet Committee on Investment (CCI) to accord fast track clearances to large projects. Till September, the CCI had cleared 209 projects worth Rs. 3.84 lakh crore.

Further the Prime Minister's Project Monitoring Group (PMG), set up to track stalled large investment projects, has cleared 128 projects worth over Rs. 4.30 lakh crore so far.

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