RBI eases norms for flexible structuring of existing projects loans

Recently, Reserve Bank of India (RBI) has issued a circular on Flexible Structuring of Long Term Project Loans to Infrastructure and Core Industries.  It may be mentioned that in the circular, flexible structuring of project loans with the option of periodic refinancing will be available only to new loans to infrastructure projects and core industries projects sanctioned after the date of the circular. In this context, banks have represented that such flexible structuring of project loans with the option of periodic refinancing may also be allowed to existing loans to infrastructure projects and core industries projects, as it would ensure long term viability of existing infrastructure/core industries sector projects by aligning the debt repayment obligations with cash flows generated during their economic life.

Accordingly, the Reserve Bank of India (RBI) has decided to allow the banks to flexibly structure the existing project loans to infrastructure projects and core industries projects with the option to periodically refinance the same as per the specified norms. Further, a detailed note on the guidelines for “Flexible Structuring of Existing Long Term Project Loans to Infrastructure and Core Industries” is enclosed herewith for your ready reference.