Definition of 'Infrastructure Lending' revised by RBI

RBI has revised the definition of ‘infrastructure lending’. The revised definition, would make sectors and sub-sectors eligible for infrastructure lending by banks and financial institutions with immediate effect.

RBI has been decided to harmonize the definition of ‘infrastructure lending for the purpose of financing of infrastructure by the banks and Financial Institutions’ with that of the Master List of Infrastructure sub-sectors’ notified by the Government of India on March 27, 2012.

The exposure of banks to projects under sub-sectors which were included under our previous definition of infrastructure, but not included under the revised definition, will continue to get the benefits under ‘infrastructure lending’ for such exposures till the completion of the projects. However, any fresh lending to those sub-sectors from the date of this circular will not qualify as ‘infrastructure lending’.

List of sub-sectors for ‘Infrastructure Lending’

A credit facility extended by lenders (i.e. banks and select AIFIs) to a borrower for exposure in the following infrastructure sub-sectors will qualify as ‘infrastructure lending’:

Source: RBI

1. Includes supporting terminal infrastructure such as loading/unloading terminals, stations and buildings
2. Includes strategic storage of crude oil
3. Includes city gas distribution network
4. Includes optic fibre/cable networks which provide broadband / internet
5. Includes Medical Colleges, Para Medical Training Institutes and Diagnostics Centres
6. Includes cold room facility for farm level pre-cooling, for preservation or storage of agriculture and allied produce, marine products and meat.

Month: Current Affairs - November, 2012