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SFB Credit Facility Amendment: Multi-Unit Projects & Power Transmission

Current · Source: Reserve Bank of India · official publication, rbi.org.in · ~1 min read
Quick answerRBI now lets small finance banks treat multi-unit projects as separate loans if each unit is independently viable. For power projects, transmission right-of-way rules follow a specific sub-paragraph. Effective immediately.
The rule, in the simplest words
How it plays out — a real example

Ravi, a credit officer at a small finance bank, receives a loan request for a solar park with 10 independent generation units. Under the new rule, he can structure 10 separate loans, each with its own viability check and financial closure, instead of one large risky exposure.

What changed

Two clarifications added to the SFB Credit Facilities Directions, 2025. First, banks can now finance independent viable units of a project as separate loans with their own financial closure, provided each unit is appraised for standalone viability. Second, for electricity generation projects involving both generation and transmission, the right-of-way requirement for transmission infrastructure is determined as per sub-paragraph (3) of paragraph 80.

What it means for you

Small finance banks gain flexibility to structure project finance for multi-unit ventures, potentially reducing risk concentration. For power sector loans, clearer transmission right-of-way rules may streamline appraisal and compliance. Banks must ensure each unit's standalone viability is rigorously assessed before financing.

What you must do

Who it affects

Small finance banks, Project finance teams, Power sector lending desks, Credit risk and compliance departments

❓ Common questions

Can we finance a single large project as multiple smaller loans under this amendment?

Yes, if the project can be split into independent viable units, each with its own financial closure and standalone viability appraisal done before lending.

Does this apply to all project types or only power projects?

The multi-unit provision applies to any project. The right-of-way clarification is specific to electricity generation projects that include transmission infrastructure.

🧰 Tools — save, print, templates & related
🛠 Banker’s toolkit — checklists & reply templates →
Who does what — compliance checklist
💻 IT / Systems
  • Train credit teams on the new right-of-way determination rule for power projects with both generation and transmission scope.
📜 Compliance
  • Update internal project finance policies to allow separate financing of independent viable units with standalone viability appraisal.
  • Ensure each unit's financial closure is documented separately and ex-ante viability is certified.
  • Review existing multi-unit project exposures to align with the new discretion framework.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template

Example: if you are a Compliance officer at a bank this circular applies to (Small finance banks, Project finance teams, Power sector lending desks, Credit risk and compliance departments), your first concrete step on “SFB Credit Facility Amendment: Multi-Unit Projects & Power Transmission” is: “Update internal project finance policies to allow separate financing of independent viable units with standalone viability appraisal.”.

  1. Circular: https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=13560&Mode=0 -- SFB Credit Facility Amendment: Multi-Unit Projects & Power Transmission
  2. Issued: 27 Jul 2026, 10:54 IST
  3. Action required: Update internal project finance policies to allow separate financing of independent viable units with standalone viability appraisal.
  4. Action required: Train credit teams on the new right-of-way determination rule for power projects with both generation and transmission scope.
  5. Action required: Ensure each unit's financial closure is documented separately and ex-ante viability is certified.
  6. Action required: Review existing multi-unit project exposures to align with the new discretion framework.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

💬 Banker Discussion

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BankPulse Compliance Evidence Pack — generated 27 Jul 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=13560&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert review panel. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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