The Reserve Bank of India has decided to tighten the lending norms for the real estate sector. It has released a draft harmonised prudential framework for lending to infrastructure, non-infrastructure, and commercial real estate projects. It has been clarified that in the case of providing funds under the consortium arrangements, the amount will be up to Rs. 1500 crore. Out of which, the number of individual lenders should not be less than 10 percent.
In projects where the total exposure of lenders is more than Rs. 1500 crore, the individual lender exposure should be 5 percent or Rs. 150 crore, whichever is higher. All these rules apply to scheduled commercial banks, non-banking finance companies, urban cooperative banks, and all-India financial institutions. It also clarified that a positive net present value (NPA) is mandatory for any project financed by lenders. Lenders are required to independently evaluate the NPV of the project every year.
