Infrastructure loan refinancing: RBI gives green signal
There is some good news for the Infrastructure projects. The sector was reeling under the slowdown and the banks had declared many loans to such projects as bad debts. Infrastructure companies may take advantage of a small window of opportunity offered by the Reserve Bank of India (RBI) to refinance at least Rs 30,000 crore worth of loans from the banks. Now these loans from the banks will not be exposed to be classified as bad loans.
The RBI on August 7 had relaxed takeout financing norms for the existing infrastructure loans. This was done by lowering the minimum takeout requirement from 50% to 25%.The corporate head of a private sector bank expressed his happiness over this move and stated that every company with ongoing projects in the roads and power sector would explore this window.
The corporate head also mentioned that companies like Adani, JP and GMR could explore this window and are already drawing up plans. This move will help the banks and the infrastructure developers tremendously. The refinance demand to the tune of Rs 30,000 crore is expected to come up in the next few months.
However these infra companies did not comment anything about this development. The central bank also clarified that loans worth a minimum of Rs 1,000 crore would be eligible for takeout financing agreement.
In addition, a project should have started commercial operation after achieving the date of commencement of commercial operation. According to RBI, only standard loans are eligible for takeover. The corporate head also mentioned that the banks are making changes to their credit policy based on the new norms.
Some companies in the infrastructure space have made enquiries and they are keen to sell non-core assets to reduce debt.
Source- The Economic Times
