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RBI norms on project-cost sharing by banks, FIs soon

The government on Friday said the Reserve Bank of India would soon come up with guidelines permitting banks and financial institutions to share costs of projects.

"The FIs are keen to share the costs of movable and immovable assets of projects with banks. The details of this are yet to be worked out. RBI has been asked to come up with the guideline," banking secretary Devi Dayal told reporters after a meeting of FI chiefs with Finance Minister Yashwant Sinha.

Dayal said keeping in mind the state of the economy the process will be taken up expeditiously and the ground rule for banks and FIs would be worked out.

The FIs also discussed with the government ways of assisting companies to raise capital at cheaper costs by subscribing to their debt papers.

Dayal said the FIs were also asked to fund medium sized companies which are coming up with projects in infrastructure related sectors.

"There are projects related to infrastructure sector which could be developed at lower costs. FIs were asked to support these projects through equity investments," Dayal said.

FI chiefs told Sinha that they had adequate funds but there was no demand from the traditional sectors like steel and textiles.

Although there was demand from the infrastructure sectors like power, telecom and urban infrastrcuture, the FIs were facing hurdles in completing them.

Dayal said the finance minister had assured the FIs that government would make efforts to remove legal hassles.

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