RBI announces new norms for delayed infrastructure projects

Mumbai, Apor 29 (UNI) Reserve Bank of India today announced that infrastructure projects, which did not commence commercial production beyond a period of two years after the date of completion, would be treated as sub-standard by banks that had financed them.

RBI, in its annual policy statement for 2008-09, said following representations regarding delays in completion of infrastructure projects for legal and other extraneous reasons it had reviewed selective projects and concluded that there was merit in the representation, and hence the norms have been changed. Completion of the project should be clearly spelt out at the time of financial closure of the project.

Originally, the norms had stated that the project which did not start commercial production beyond six months after the date of completion, would be declared as sub-standard asset. However, the period of recognising asset impairment was extended to one year for infrastructure projects from March 31 last year.

UNI VK GR AG1731