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Indian banks to ask regulator to not raise provisioning for infra loans

Money Control

Money Control · 1y ago

Indian banks to ask regulator to not raise provisioning for infra loans

The Indian Banks' Association (IBA) plans to ask the Reserve Bank of India (RBI) not to increase provisioning for infrastructure project loans. The RBI recently proposed a sharp increase in the amount of capital that banks and non-banking financial companies should set aside for such loans. The IBA argues that this blanket 5% provisioning requirement would increase the cost of implementing projects and hurt project financing. It suggests that additional provisioning requirements should be brought in only in case of delays in project completion. The IBA is expected to send a formal request to the RBI before the deadline of June 15th.

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