RBI redefines infrastructure lending

K. R. Srivats Updated - November 21, 2012 at 10:51 AM.

The Reserve Bank of India has come up with a new definition of infrastructure for the purpose of banks’ lending.

With this move, the central bank has harmonised its definition of infrastructure with that of the master list of infrastructure sector/sub-sectors notified by the Central Government in March this year.

RBI Governor D. Subbarao had in the second quarter review of monetary policy announced that the definition of infrastructure lending would be harmonised with the Centre’s definition.

Accordingly, RBI has come up with a revised definition of infrastructure to be effective from Tuesday.

For projects coming under sub-sectors which were included under RBI’s previous definition of infrastructure, but not included under the revised definition, banks’ will continue to get the benefits under ‘infrastructure lending’ for such exposures till the completion of the projects.

However, any fresh lending to those sub-sectors from November 20 will not qualify as ‘infrastructure lending’, RBI has said.

Banking industry sources said that the RBI has now made it amply clear that certain kinds of infrastructure like diagnostic centres and medical colleges would be considered as part of definition of ‘Hospitals’ and hence eligible for bank funding.

Also, three star or higher category hotels located outside cities with population of more than 1 million will be eligible for bank funding under this window.

>srivats.kr@thehindu.co.in

Published on November 21, 2012 05:17