Relax lending norms for road projs:NHAI Chairman to RBI Governor

RBI has extended its flexible refinancing and repayment option for long-term infrastructure projects to existing ones where the total exposure of lenders is more than Rs 500 crore.
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Feb 23, 2016, 07.58 AM | Source: PTI

Relax lending norms for road projs:NHAI Chairman to RBI Governor

RBI has extended its flexible refinancing and repayment option for long-term infrastructure projects to existing ones where the total exposure of lenders is more than Rs 500 crore.

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Relax lending norms for road projs:NHAI Chairman to RBI Governor

RBI has extended its flexible refinancing and repayment option for long-term infrastructure projects to existing ones where the total exposure of lenders is more than Rs 500 crore.

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Relax lending norms for road projs:NHAI Chairman to RBI Governor
Seeking priority sector lending for highways sector given its multiplier effect on economy, NHAI urged RBI Governor Raghuram Rajan to relax lending norms for road developers.

"We had a detailed an hour-long meeting with Reserve Bank of India (RBI) Governor. We sought his intervention into the trouble points in road sector lending including inclusion of projects lesser than Rs 500 crore in its 5:25 scheme," NHAI Chairman Raghav Chandra told PTI.

RBI has extended its flexible refinancing and repayment option for long-term infrastructure projects to existing ones where the total exposure of lenders is more than Rs 500 crore.

The 5:25 scheme at present allows banks to extend long-term loans of 20-25 years to match the cash flow of projects, while refinancing them every five or seven years.

Chandra said Rajan was also requested to reconsider external commercial borrowing (ECB) norms to allow foreign currency debt to infrastructure sector for medium term also.

Also, the Chairman was requested that lending can continue with NPAs besides converting debt into equity if the valuation of equity is done as per SEBI's guidelines.

NHAI Member Finance Satish Chandra, who also accompanied the Chairman in the meeting, said, "The meeting was quite fruitful and we are expecting some positive outcomes."

The meeting assumes significance as projects entailing investment of about Rs 30,000 crore are still stuck in the highways sector due to factors like equity crunch and regulatory hurdles.

According to the RBI's priority sector norms, banks have to necessarily provide 40 percent of their total lending to the sectors so classified.

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Relax lending norms for road projs:NHAI Chairman to RBI Governor

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