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

Reserve Bank of India (Project Finance) Directions, 2025

19-Jun-2025 | RBI/2025-26/59 DOR.STR.REC.34/21.04.048/2025-26

Reserve Bank of India (RBI) has issued the Reserve Bank of India (Project Finance) Directions, 2025, which outline the framework for financing projects in both infrastructure and non-infrastructure sectors. These directions will take effect on October 1, 2025.

Key highlights include:

1. The guidelines are applicable to Commercial Banks, Non-Banking Financial Companies (NBFCs), Primary (Urban) Cooperative Banks, and All-India Financial Institutions (AIFIs) that engage in project finance.

2. Loan disbursement is permitted only after obtaining essential land and necessary permissions. Disbursement must align with the construction stage and certified progress of the project.

3. In the event of delays to the project's commencement (changes in the Date of Commencement of Commercial Operations - DCCO), the RBI allows a limited extension of up to 3 years for infrastructure projects and up to 2 years for non-infrastructure projects.

4. Lenders are required to set aside additional funds for projects that receive DCCO extensions, particularly if there are significant delays or if the project is classified as non-infrastructure.

5. Project Data must be maintained using the project finance database form provided in Annex 3. Any updates should be made within 15 days of the change, and the necessary systems must be implemented within 3 months from the effective date.

6. If any financial difficulties or credit events arise during the construction phase, lenders must quickly assess the situation and may need to implement a resolution plan. If such plans are not enacted within the specified timelines, the loan must be categorized as a Non-Performing Asset (NPA).

For detailed information, please refer to the attached document.

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