Mumbai: The Reserve Bank on Monday said banks may extend the date of commencement of commercial operations (DCCO) of a stalled project by up to two years in case its ownership changes hands.
The Reserve Bank of India (RBI) said it has been receiving representations from banks that new promoters or developers of a stalled project may require time to revive or complete the stalled projects.
"It has been decided that in cases where, in the assessment of the banks, the implementation of the project has been stalled primarily due to inadequacies of the existing promoters and a subsequent change in the ownership of the borrowing entity has been effected, banks may permit extension of DCCO up to a further period of two years," RBI said in a notification.
In February, RBI had proposed for an extension in DCCO without change in asset classification in cases of change in ownership of projects.
It said the consequential shift in repayment schedule will not be treated as restructuring if the revised DCCO falls within the period of two years for infrastructure projects.
Further, for infrastructure projects, it said DCCO can be up to another two years, i.E., for a total of four years, in case the reason for extension of DCCO is arbitration proceedings or a court case.
For infrastructure projects delayed for other reasons beyond the control of promoters, it can be extended up to another one year, i.E., for a total of three years.
While for project loans for non-infrastructure sector (other than commercial real estate exposures), it can be extended by up to another one year or a total of two years.
