RBI to unveil new guidelines for existing projects

Kolkata, Dec 10 (IANS) The Reserve Bank of India is coming up with new set of guidelines for the 5/25 rule aimed at restructuring loans for existing projects classified as standard assets, a senior official said here on Wednesday.

"The new rule for restructuring loans for existing projects will be in place within a few days," RBI Deputy Governor S.S. Mundra said on the sidelines of an interactive session organised by CII.

In the 5/25 structure, a bank can fix a longer amortisation period (about 25 years) for loans to projects in infrastructure and core industry sectors, with periodic refinancing, say every five years.

With oil prices remaining normal and the economy seemingly stabilising the food and commodities prices, the new policy revision is highly likely.

"In the latest monetary policy, it has been indicated … that at this point of time, deflation is quite encouraging. Of course it has been supported by global factors, oil prices are low, food prices have also softened from what they were before. Then there will be room for softening of policy stance," added Mundra.