RBI gives infrastructure lending status to host of sub-sectors
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Giving a boost to key segments like roads and bridges, LNG and oil pipelines, water treatment plans, telecom towers, and three-star hotels, RBI today gave them 'infrastructure status' and paved way for them to avail easier funding from banks.
In a notification, RBI said the credit facility extended by lenders (banks and select financial institutions) to a borrower in about 30 odd sub-segment of the infrastructure sector will qualify as "infrastructure lending".
With 'infrastructure lending status' companies can avail loans for a longer period at lower rate of interest.
The government had been wanting to give a boost to the infrastructure sector to revive the sagging economy In the transport category, roads and bridges, ports, inland waterways, airport, railway track, tunnels, viaducts, bridges, urban public transport will qualify for infrastructure lending.
In the energy segment, generation, transmission, distribution, oil pipelines, oil/gas/liquefied natural gas storage facility and gas pipelines would qualify.
Likewise, solid waste management, water supply pipelines, water treatment plants, sewage collection, treatment and disposal system, irrigation (dams, channels, embankments), storm water drainage system projects come under infrastructure lending Telecommunication, telecommunication towers, education institutions, hospitals, three-star or higher category hotels located outside cities with over one million population, common infrastructure for industrial parks, SEZ, tourism facilities, agriculture markets, fertiliser (capital investment), post harvest storage infrastructure for agriculture, terminal markets, soil-testing laboratories, cold chain etc would also be included under infrastructure lending, it said.
RBI said the new definition for infrastructure lending was provided to avoid confusion and difficulties that arise due to multiplicity of definitions among various regulators, as lending to the sector has grown significantly.
The revised definition would be effective immediately, RBI said.
The exposure of banks to projects under sub-sectors which were included under the 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, it added.