Why Are Banks Worried About RBI’s New Project Finance Rules?
The Reserve Bank of India's (RBI) proposed changes for project financing could significantly alter how infrastructure and real estate projects are funded. The central bank has suggested increasing the provisioning for all project-backed loans to enhance accountability and project viability. A recent government survey of 1,873 projects revealed substantial delays and cost overruns, highlighting the need for stricter regulations. Yet, the new guidelines have sparked debate among banks and companies, who argue that higher provisions could impact profitability and increase capital costs. With…
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