
RBIs project financing norms will have negligible impact on banks, NBFCs: Report
'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)

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Economic Times
16 minutes ago
- Economic Times
10 year yield spikes amid a decline in bets on August rate cut
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Yields of the 10-year benchmark government security spiked six basis points to 6.37% on Friday, before softening slightly and closing at 6.34%.The spike in yields came after the central bank governor said price stability will be the primary concern for the central bank amid cooling retail inflation, despite Mint Road winning the 'battle' against 10-year yield had closed at 6.31% the previous day.A section of the market started pricing in another rate cut in August after India's retail inflation, as measured by the consumer price index (CPI), hit a six-year low of 2.1%, data released on July 14 change in expectations of the rate cut trajectory also impacted auction of the 10 year paper conducted on Friday, pushing prices below 100 at 99.95, with cut off yield at 6.33%. The auction was for Rs 30,000 crores'When people are not positive about the rate cut next month, why would someone hold the security, they would want to sell,' said a bond trader at a primary dealership. 'There were quite a few people who had priced in a cut in the August policy, but after the interview, markets were not very positive about it,' the trader said.'The battle against inflation is won, but war continues,' RBI Governor Sanjay Malhotra said at a banking summit organised by the newspaper in Mumbai on Friday. 'Our primary objective is to maintain price stability and we have mentioned that it is not inconsistent with the other objectives we have of growth because that is a prerequisite.'This comes just a few days before the monetary policy committee (MPC) is set to announce its rate decision on August 6. During the last MPC meet, the repo rate was reduced by a larger-than-expected 50 basis points to 5.50%'The rates went up because the market was anyway long, and those positions increased after the inflation data. Maybe because inflation was lower, markets thought that the RBI would be more open to further rate cuts in August. The governor today did not say anything different, but maintained what he has said in his previous encounters,' said a senior bond trader at another primary dealership.


Time of India
2 hours ago
- Time of India
SBI Card net profit falls 6.4% in Q1FY26 as defaults pinch
Mumbai: SBI Cards reported a 6.4% decline in net profit to Rs. 556 crore for the June quarter, compared with Rs. 594 crore a year earlier, as higher impairment losses and bad debts offset revenue growth. Tired of too many ads? go ad free now The provisions rose 22.8% year-on-year to Rs. 1,352 crore, up from Rs. 1,101 crore, dragging down profitability. Total revenue rose 12% to Rs. 5,035 crore, driven by an 11% increase in interest income to Rs. 2,493 crore and a 13% rise in fees and commission income to Rs. 2,384 crore. Operating expenses jumped 17% to Rs. 2,123 crore, while finance costs rose 6% to Rs. 813 crore due to higher receivables. Earnings before credit costs rose 11% to Rs. 2,100 crore. The company added cards and expanded usage during the quarter. Cards-in-force rose 10% year-on-year to 2.12 crore, while total spends climbed 21% to Rs. 93,244 crore. Receivables rose 7% to Rs. 56,607 crore. SBI Cards maintained its 19.1% market share in cards-in-force and 16.6% in spends, placing it second and third in the industry, respectively. Asset quality deteriorated marginally. Gross NPAs stood at 3.07%, compared with 3.06% a year earlier. Net NPAs rose to 1.42% from 1.11%. The capital adequacy ratio stood at 23.2%, with Tier I capital at 17.9%, well above the RBI's requirement.
&w=3840&q=100)

First Post
2 hours ago
- First Post
India extends ₹4,850 crore line of credit to Maldives during PM Modi's visit, FTA talks begin
India has extended a new line of credit worth ₹4,850 crore to the Maldives, Foreign Secretary Vikram Misri announced during Prime Minister Narendra Modi's state visit to Malé read more India has extended a fresh line of credit worth ₹4,850 crore to the Maldives, Foreign Secretary Vikram Misri said on Friday. The announcement was made during Prime Minister Narendra Modi's state visit to Malé. #WATCH | Malé, Maldives | On PM Modi's visit to Maldives, Foreign Secretary Vikram Misri says, "We have signed an MoU related to the extension of a fresh line of credit, of Rs 4850 crore to the Maldives. This is the first Line of Credit (LoC) extended to the Maldives that is… — ANI (@ANI) July 25, 2025 STORY CONTINUES BELOW THIS AD 'This Line of Credit represents a continuation of the tradition of assistance to the development needs of the Maldives,' Misri said, adding that the funds are expected to support a range of infrastructure projects that will benefit the Maldivian people. In addition to the new credit line, the two sides also signed a mandatory agreement amending an existing dollar-denominated line of credit. The revision is set to significantly ease the Maldives' debt burden, slashing its annual repayment obligations by 40 per cent from nearly $51 million to $29 million. The credit extension and debt restructuring come amid efforts by both countries to strengthen bilateral ties with PM Modi's visit being the first by a foreign head of state or government during President Muizzu's term. PM Modi also announced that discussions for the free trade agreement have also started between the two nations.