RBI revises norms for project loan restructuring
On Wednesday, India’s apex bank – The Reserve Bank of India (RBI) – issued clarifications with regard to classification of assets for project loans prior to the start of commercial operations.
The clarifications issued by the RBI mark a revision of the norms for project loan restructuring.
Going by the clarifications issued by the RBI, project loan restructuring will not take into account revisions made to the date of commencement of commercial operations (DCCO) and the resulting change in repayment schedule for equal or shorter duration, provided that some conditions are met.
The conditions for DCCO and shifted repayment schedule not to be treated as restructuring include the stipulation that the revised DCCO should fall within the period of two years from the original stipulated DCCO for infrastructure projects and one year for non-infrastructure projects; with all the other terms and conditions of the project loan remaining the same.
With regard to the revised norms, the RBI said that it will permit restructuring of infrastructure project loans up to an additional two years in case of any court cases; and up to one year if the delay in projects is caused by factors beyond the control of the promoter. For non-infrastructure project loans, additional restructuring of loans will be allowed for one year.
Source – The Financial Express
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