RBI · Banking Regulation
RBI eases project finance rules for small finance banks
Small finance banks can now treat independent viable units as separate loans, and get clearer transmission right of way rules for electricity projects.
What changed
- Small finance banks can finance independent viable units of a project as separate loans with standalone appraisal
- Electricity generation projects: right of way for transmission determined per sub-paragraph (3)
The read
The RBI amended its credit facility directions for small finance banks, adding two clarifications. Banks may now treat independently viable units of a project as separate loans, each with its own financial closure and ex-ante standalone appraisal. This gives banks more flexibility in project financing. For electricity generation projects with transmission infrastructure, the right of way requirement is now determined as per sub-paragraph (3). The changes take immediate effect, reducing ambiguity in project finance rules.
Primary source: rbi.org.in