The Reserve Bank of India has amended its 2025 Small Finance Banks – Credit Facilities Directions, adding two clarifications relevant to project finance treatment. The changes allow a bank to finance multiple independent viable units of a project as separate projects, at its discretion, where the project can be operationalised in that way and each unit is assessed in advance for standalone viability. The amendment also clarifies the treatment of electricity generation projects that combine generation assets with transmission or evacuation infrastructure. In such cases, the right of way requirement for the transmission component may be determined under sub-paragraph (3). The amended directions take effect immediately.
Reserve Bank of India2026-07-15
Reserve Bank of India amends small finance bank credit rules to permit separate financing of viable project units and clarify power project right of way treatment
The Reserve Bank of India has revised its small finance bank credit directions to clarify project finance treatment. Banks may separately finance independent viable units of a project if each unit has its own financial closure and is appraised for standalone viability, and integrated power generation projects with evacuation infrastructure now have a clarified approach to assessing transmission right of way requirements. The changes apply immediately.