MUMBAI, Jun 21: The final guidelines on project loans will “suitably reflect” the industry’s concerns on the subject, a senior Reserve Bank official said today.
Acknowledging that the central bank is in receipt of the feedback to the draft guidelines issued on May 24, RBI Executive Director R Lakshmi Kanth Rao said there are “several complexities” in project finance, and the apex bank is attempting to address underlying risks with the guidelines.
“The feedback has been received, and we are going through that, and we hope that the final guidelines will reflect suitably all the concerns,” he said, addressing industry leaders at an event organised by Assocham here.
When asked later about timelines, he did not specify by when the central bank plans to come out with the final guidelines.
It can be noted that the industry has been vocal in expressing its concerns, especially on the aspect of provisioning where the RBI is proposing to mandate lenders to set aside 5 per cent as provisioning.
Addressing the event focused on NBFCs, Rao also asked the non-banking finance companies to pay more attention to the compliance aspect, pointing out that an entity needs to balance it with the business model and prudence as well.
Based on the scale, NBFCs are required to meet newer regulatory requirements and compliance requirements, he said, acknowledging that the compliance load has gone up for the “right reasons”.
“So, that is where the NBFCs need to really tighten their compliance systems, because some of them may not have the proper setup,” he said, adding that the guidelines need to be taken in “right earnest and adhered to”. (PTI)
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