What changed
RBI revised the definition of 'infrastructure lending' to match the Government of India's master list of infrastructure sub-sectors notified on March 27, 2012. The new definition is effective from November 20, 2012, replacing the earlier definition from the 2007 circular and the Master Circular dated July 2, 2012. Sub-sectors previously included but now excluded from the revised list will continue to receive infrastructure lending benefits only for existing exposures until project completion; fresh lending to those sub-sectors will not qualify.
What it means for you
Banks and select AIFIs must use the updated list of sub-sectors (e.g., transport, energy, water, communication, social infrastructure) to classify new loans as infrastructure lending. Loans to sub-sectors dropped from the list lose infrastructure status for new disbursements, potentially affecting risk weights and provisioning. Existing projects under old sub-sectors are grandfathered, so banks need to track legacy exposures carefully.
What you must do
- Update internal credit policies and systems to reflect the revised infrastructure sub-sector list from the circular's annex.
- Classify all new infrastructure loans from November 20, 2012, using only the harmonised list; exclude sub-sectors not in the new list.
- Maintain separate tracking for existing loans to now-excluded sub-sectors to ensure continued benefits until project completion.
- Train credit and risk teams on the revised definition to avoid misclassification and regulatory non-compliance.
Who it affects
All Scheduled Commercial Banks (excluding RRBs), Select All India Financial Institutions (NHB, NABARD, EXIM Bank, SIDBI), Credit and risk management teams, Infrastructure project borrowers
What happens to existing loans to sub-sectors that are no longer in the infrastructure list?
Existing exposures to those sub-sectors will continue to receive infrastructure lending benefits until the project is completed. However, any fresh lending to those sub-sectors from November 20, 2012, will not qualify as infrastructure lending.
Which sub-sectors are newly included in the harmonised definition?
The revised list includes sub-sectors like urban public transport (except rolling stock in case of urban road transport), gas pipelines, city gas distribution, telecommunication towers, and cold chain. Refer to the annex in the circular for the full list.
Does this circular affect priority sector lending classification?
The circular specifically addresses infrastructure lending for regulatory purposes (e.g., exposure norms). Priority sector lending is governed by separate RBI guidelines and is not covered by this circular.