RBI RELAXES NORMS ON INFRA LENDING

The Reserve Bank of India has relaxed the prudential norms on infrastructure assets, financed by banks. In its latest notification, RBI has stated that banks can declare an infrastructure project account as sub-standard only when commercial production does not begin within one year of the project’s completion. Having stated that in case of infrastructure projects funded by banks, the date of completion of the project should be clearly spelt out at the time of financial closure of the project, the central bank has clarified that the revised instructions should come into force with effect from March 31, 2007.