Latest news with #Directions
India Gazette
2 hours ago
- Business
- India Gazette
RBIs project financing norms will have negligible impact on banks, NBFCs: Report
New Delhi [India], June 21 (ANI): The relaxation in project financing norms by the Reserve Bank of India (RBI) to banks and NBFCs will have a negligible impact on the profitability on their profitability and balance sheet, according to a report by Motilal Oswal. 'We believe the impact of the revised norms on bank/NBFC profitability will be negligible, as the existing book remains unaffected,' the report added. However, the report added, 'For new project loans, any incremental provisioning cost is likely to be passed on to borrowers, especially in a declining rate environment, through yield adjustments.' The report added that RBI's final project finance guidelines are a positive for banks and NBFCs, especially when compared to the stricter 2024 draft. The apex bank on Wednesday issued the final Reserve Bank of India (Project Finance) Directions, 2025, which lays down the comprehensive framework for income recognition, asset classification, and provisioning norms for project loans under implementation. The most notable relief came from the significantly eased provisioning requirements, which were cut to just 1 per cent during construction compared to 5 per cent proposed earlier and as low as 0.4 per cent post Date of Commencement of Commercial Operations (DCCO). These new guidelines will come into effect from October 1 current year. The draft guidelines proposed an enabling framework for the regulated entities (REs) for financing project loans, while addressing the underlying risks. RBI said that it received feedback from nearly 70 entities, including banks, NBFCs, industry bodies, academicians, law firms, individuals, and the Central Government. As per to new rules, the RBI introduced a principle-based regime for stress resolution in project finance exposures, applicable across all regulated entities (REs), ensuring a harmonised approach. The report stated that the easing norms reduce capital drag while still maintaining prudence. 'Overall, the final norms strike a balanced approach, enabling continued flow of project finance with minimal impact on the profitability or balance sheet strength of lenders,' the report further added. (ANI)
Mint
3 hours ago
- Business
- Mint
RBIs project financing norms will have negligible impact on banks, NBFCs: Report
New Delhi [India], June 21 (ANI): The relaxation in project financing norms by the Reserve Bank of India (RBI) to banks and NBFCs will have a negligible impact on the profitability on their profitability and balance sheet, according to a report by Motilal Oswal. "We believe the impact of the revised norms on bank/NBFC profitability will be negligible, as the existing book remains unaffected," the report added. However, the report added, "For new project loans, any incremental provisioning cost is likely to be passed on to borrowers, especially in a declining rate environment, through yield adjustments." The report added that RBI's final project finance guidelines are a positive for banks and NBFCs, especially when compared to the stricter 2024 draft. The apex bank on Wednesday issued the final Reserve Bank of India (Project Finance) Directions, 2025, which lays down the comprehensive framework for income recognition, asset classification, and provisioning norms for project loans under implementation. The most notable relief came from the significantly eased provisioning requirements, which were cut to just 1 per cent during construction compared to 5 per cent proposed earlier and as low as 0.4 per cent post Date of Commencement of Commercial Operations (DCCO). These new guidelines will come into effect from October 1 current year. The draft guidelines proposed an enabling framework for the regulated entities (REs) for financing project loans, while addressing the underlying risks. RBI said that it received feedback from nearly 70 entities, including banks, NBFCs, industry bodies, academicians, law firms, individuals, and the Central Government. As per to new rules, the RBI introduced a principle-based regime for stress resolution in project finance exposures, applicable across all regulated entities (REs), ensuring a harmonised approach. The report stated that the easing norms reduce capital drag while still maintaining prudence.
Time of India
6 hours ago
- Business
- Time of India
RBIs project financing norms will have negligible impact on banks, NBFCs: Report
The relaxation in project financing norms by the Reserve Bank of India ( RBI ) to banks and NBFCs will have a negligible impact on the profitability on their profitability and balance sheet, according to a report by Motilal Oswal. "We believe the impact of the revised norms on bank/NBFC profitability will be negligible, as the existing book remains unaffected," the report added. However, the report added, "For new project loans, any incremental provisioning cost is likely to be passed on to borrowers, especially in a declining rate environment, through yield adjustments." Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Here's The Average Price of a 6-Hour Gutter Guards Upgrade Read More Undo The report added that RBI's final project finance guidelines are a positive for banks and NBFCs, especially when compared to the stricter 2024 draft. The apex bank on Wednesday issued the final Reserve Bank of India (Project Finance) Directions, 2025, which lays down the comprehensive framework for income recognition, asset classification, and provisioning norms for project loans under implementation. Live Events The most notable relief came from the significantly eased provisioning requirements, which were cut to just 1 per cent during construction compared to 5 per cent proposed earlier and as low as 0.4 per cent post Date of Commencement of Commercial Operations (DCCO). These new guidelines will come into effect from October 1 current year. The draft guidelines proposed an enabling framework for the regulated entities (REs) for financing project loans, while addressing the underlying risks. RBI said that it received feedback from nearly 70 entities, including banks, NBFCs, industry bodies, academicians, law firms, individuals, and the Central Government. As per to new rules, the RBI introduced a principle-based regime for stress resolution in project finance exposures, applicable across all regulated entities (REs), ensuring a harmonised approach. The report stated that the easing norms reduce capital drag while still maintaining prudence. "Overall, the final norms strike a balanced approach, enabling continued flow of project finance with minimal impact on the profitability or balance sheet strength of lenders," the report further added.
Mint
21 hours ago
- Business
- Mint
PFC, HUDCO, IREDA, REC shares surge
New Delhi, Shares of financial institutions such as PFC and HUDCO surged on Friday after the Reserve Bank issued norms to provide a harmonised framework for financing of projects in infrastructure and non-infrastructure sectors by banks, NBFCs and other regulated entities. The stock of Power Finance Corporation surged 4.92 per cent, HUDCO soared 4.72 per cent, Indian Renewable Energy Development Agency jumped 4.03 per cent, REC rallied 2.96 per cent and Indian Railway Finance Corporation climbed 1.47 per cent on the BSE. "The rally was broad-based, with all sectoral indices ending in the green, led by financials after the RBI eased provisioning norms for project... effective October 2025. This is particularly positive for power financiers like PFC and REC, due to their large exposure to power sector projects," Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services Ltd, said. The Reserve Bank of India Directions, 2025 lay down the revised regulatory treatment upon change in the 'date of commencement of commercial operations' of such projects in the backdrop of a review of the extant instructions and analysis of the risks inherent in such financing. The RBI said the directions entail the adoption of a principle-based regime for resolution of stress in project finance exposures, harmonised across regulated entities . "In under-construction projects where the aggregate exposure of the lenders is up to ₹ 1,500 crore, no individual lender shall have an exposure which is less than 10 per cent of the aggregate exposure," the RBI said. For projects where aggregate exposure of all lenders is more than ₹ 1,500 crore, the exposure floor for an individual lender shall be 5 per cent or ₹ 150 crore, whichever is higher. Further, a lender shall ensure that all applicable approvals/clearances for implementing/constructing the project are obtained before financial closure. The Reserve Bank of India Directions, 2025 shall come into force with effect from October 1, 2025, the central bank said. "Final guidelines on project finance comes as a relief to the lenders..." A M Karthik, Senior Vice President & Co-Group Head, Financial Sector Ratings, ICRA Ltd, said on the RBI guidelines on project loans. This article was generated from an automated news agency feed without modifications to text.
Business Standard
4 days ago
- Business
- Business Standard
RBI issues draft norms on rupee interest rate derivatives
The Reserve Bank of India issued draft regulations for Rupee Interest Rate Derivatives to align the extant regulatory framework with the market and other related developments. The extant regulatory framework for Rupee Interest Rate Derivatives (IRD) was issued in June 2019. Since then, there have been several new developments in the market, including the emergence of new products as well as the participation of non-residents in the market. Accordingly, a comprehensive review of the IRD Directions was undertaken, and the draft Directions have been prepared to align it with the market and other related developments, RBI stated. The reporting requirements under the Directions have also been rationalised to reduce compliance burden. Separately, a requirement for reporting of IRD transactions undertaken globally is proposed to be introduced with a view to enhancing transparency in the Rupee IRD market, the central bank noted.
