The Reserve Bank of India (RBI) on Tuesday revised the definition of ‘infrastructure lending’, which would make sectors and sub-sectors eligible for infrastructure lending by banks and financial institutions with immediate effect.
The exposure of banks to projects under sub-sectors which were included under the RBI’s previous definition of infrastructure — as per the circular of November 30, 2007, but not included under the revised definition, will continue to get the benefits under ‘infrastructure lending’ 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’, the RBI said in a notification to all banks and financial institutions.
The Government of India had notified a master list of infrastructure sectors/sub-sectors in March 2012 to avoid multiplicity of definitions among various regulators which gives rise to confusion and difficulties. The sectors and sub-sectors come under revised infrastructure lending are:
Transport: Roads and bridges, ports inland waterways, airport, railway track, tunnels, viaducts, bridges, including supporting terminal infrastructure such as loading/unloading terminals, stations and buildings, urban public transport (except rolling stock in case of urban road transport).
Energy: Electricity generation, electricity transmission, electricity distribution, oil pipelines and oil/gas/liquefied natural gas (LNG) storage facility (including strategic storage of crude oil) and gas pipelines, including city gas distribution network.
Water and sanitation: Solid waste management, water supply pipe lines, water treatment plants, sewage collection, treatment and disposal system and irrigation (dams, channels, embankments and the like) and storm water drainage system.
Communication: Telecommunication (fixed network) including optic fibre/cable networks which provide broadband / internet and telecommunication towers.
Social and commercial infrastructure: Educational institutions (capital stock), hospitals (capital stock), including medical colleges, para medical training institutes and diagnostics centres and three-star or higher category classified hotels located outside cities with population of more than one million.