November 20, 2012
All Scheduled Commercial Banks
(excluding RRBs) and
Select All India Financial Institutions (AIFIs)
(NHB, NABARD, EXIM Bank and SIDBI).
Second Quarter Review of Monetary Policy 2012-13 – Definition of ‘Infrastructure Lending’
Please refer to our circular DBOD.No.BP.BC.52/21.04.048/2007-08 dated November 30, 2007 on ‘Financing of Infrastructure by the Banks and Financial Institutions – Definition of Infrastructure Lending’. The latest list of the items included under infrastructure sector is furnished in Annex 1 of our Master Circular DBOD.No.Dir.BC. 3/13.03.00/2012-13 dated July 2, 2012 on ‘Exposure Norms’.
2. As indicated in the Second Quarter Review of Monetary Policy 2012-13 under paragraphs 110 and 111 (extract enclosed) announced on October 30, 2012 on ‘Definition of Infrastructure Lending’, it has been decided to harmonise 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. Accordingly, the revised definition of ‘infrastructure lending’ is given in the Annex to this circular.
3. The revised definition of ‘infrastructure lending’ will be effective from the date of this circular. 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’.
Chief General Manager-in-Charge
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’:
|3.||Water & Sanitation||
|5.||Social and Commercial Infrastructure||
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.
Extract from Second Quarter Review of Monetary Policy 2012-13 announced on October 30, 2012.
V. Regulatory and Supervisory Measures
Definition of Infrastructure Lending
110. Banks’ lending to the infrastructure sector has grown significantly. As a multiplicity of definitions among various regulators gives rise to confusion and difficulties, the Government of India has notified a master list of infrastructure sectors/sub-sectors in March 2012. Accordingly, it is proposed:
111. Detailed guidelines in this regard are being issued separately.