![New rules for project finance has been proposed by RBI New rules for project finance has been proposed by RBI](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhoteDz8DmBuvHBaboxmgiNekISovaH55MVzbarOuv62Y-HtBCeQV6El_IVd8g1qdzjDiUFE3QmQg5erwcM-QKoMT_n3TuZl0CoSl6JfioSf-TqEt2nA4OwupoRheca7fvuh6d9AxMO6Tym-QGg5xWFBSLZv8CgQZhOtOX4bKDSzbPa66tS4vli7SumyXzJ/w320-h192-rw/Copy%20of%20Copy%20of%20Copy%20of%20Copy%20of%20Copy%20of%20Untitled%20(500%20%C3%97%20300%20px)%20(500%20%C3%97%20280%20px)%20(500%20x%20300%20px)%20(9).png)
- Here are some key features of the proposed rules:
- Higher provisioning during construction: Banks would need to set aside more money (up to 5%) as a buffer against potential loan defaults during the construction phase of a project. This is significantly higher than the current requirement.
- Provisioning linked to project stage: The amount of money set aside would decrease as the project progresses to operational stages.
- Stricter timelines for NPA classification: Projects facing delays of more than six months from the planned completion date could be classified as non-performing assets (NPAs).
Question:
Q.1 What is the main goal of the RBI’s proposed new rules for project finance?a. To increase the profitability of banks
b. To increase the number of non-performing assets (NPAs)
c. To decrease the number of infrastructure projects
d. To manage risks associated with long-term infrastructure projects