• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

A file picture of HPCL’s Vizag-Vijayawada pipeline

Our Bureau

Mumbai, Nov. 30 Lending to projects involving laying down or maintenance of gas, crude oil or petroleum pipelines will now be included under infrastructure lending of banks and financial institutions.

In a notification released today, the Reserve Bank of India said it was expanding the scope of infrastructure in view of the importance of pipelines in the industrial development of the country.

The advantage of infrastructure lending is that banks are allowed to have higher exposure to this sector. While banks are allowed to lend up to 15 per cent of their total capital to a single borrower in case of normal lending, in case of infrastructure lending the limit is 25 per cent of total capital. Similarly, in case of lending to a borrower group, a bank can lend up to 40 per cent of total capital, while in case of infrastructure lending the limit is 50 per cent of total capital.

The other advantage of infrastructure lending is that repayment can be over a longer period given the longer gestation period of the projects, said a senior bank official.

More Stories on : Financial Policy | Infrastructure | Petroleum

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Forex reserves rise $1.13 b

Copyright © 2007, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line