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Corporate Laws Central Ministry of Finance Reserve Bank of India Act, 1934

RBI Issues the Reserve Bank of India (Project Finance) Directions, 2025

19-Jun-2025 | Press Release: 2025-2026/563

Reserve Bank of India has issued the Reserve Bank of India (Project Finance) Directions, 2025, which will take effect from October 1, 2025. These Directions include the following key points: 1. Adoption of a principle-based approach for resolving stress in project finance exposures, ensuring consistency across regulated entities (REs). 2. Rationalization of the permissible extensions for the ‘date of commencement of commercial operations’ (DCCO), with an overall maximum extension of three years for infrastructure projects and two years for non-infrastructure projects. 3. Providing flexibility to REs to extend the DCCO within these ceilings based on their commercial assessments. 4. Adjustment of the standard asset provisioning requirement to 1% for projects under construction. This requirement will gradually increase for each quarter that the DCCO is deferred. The requirement for under-construction Commercial Real Estate (CRE) exposures will be slightly higher at 1.25%. 5. Under-construction projects that have already achieved financial closure will continue to follow existing provisioning norms to ensure seamless implementation. 6. During the operational phase, the standard asset provisioning requirement will be reduced to 1% for CRE, 0.75% for CRE-RH, and 0.40% for other project exposures.

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