Shares of Power Finance Corporation (PFC) rose over 3% in early trade on Friday, reacting positively to the Reserve Bank of India’s (RBI) finalised project finance guidelines released on June 19. As of 9:28 AM, the shares were trading 3.19% higher at Rs 402.80.
The updated norms ease provisioning requirements for lenders, which had been a concern under the earlier draft guidelines proposed in May 2024. Under the new rules, banks and financial institutions must maintain a 1.25% general provision on loans linked to commercial real estate (CRE) projects during the construction phase. For CRE-Residential Housing (CRE-RH) and other infrastructure projects under construction, the requirement is set at 1%.
During the operational phase, the provisioning is further relaxed to 1% for CRE, 0.75% for CRE-RH, and 0.40% for other projects.
The final guidelines are notably less stringent than the draft, which had recommended a uniform 5% provision for under-construction projects.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information.
