Indian power financiers gain after RBI eases provisions rules for infra loans

REC

20/06/2025 05:30

** Indian power financiers REC RECM.NS and Power Finance Corp PWFC.NS both rise ~4%

** Reserve Bank of India says it would require lenders to set aside 1% of the value of loans for under-construction infrastructure projects as provisions, lower than its earlier draft proposal of up to 5%, following an appeal by lenders

** The requirement will come into effect on October 1, RBI says

** Jefferies analysts call RBI's norms a "positive" for infra lenders such as REC and PWFC

** Citi analysts say RBI's final directions have "significantly" relaxed provisioning requirements, taking a more lenient, lender-friendly approach

** This meaningfully eases risk of project cost escalations or lenders pulling back from project finance opportunities - Citi

** YTD, REC down 20.5% while PWFC 9% lower

 (Reporting by Kashish Tandon in Bengaluru)

 ((Kashish.tandon@thomsonreuters.com))