Govt evaluating RBI proposal for higher infrastructure provisioning; bankers, NBFCs voice concern

Lenders may oppose the draft rules, which proposes provisioning of up to 5% from current 0.4%, due to concerns over rising interest rates and potential disruption to capital expenditure. Banks plan to lobby against the steep increase, arguing it could affect project viability and economic momentum. State-owned NBFCs and infrastructure firms are also raising concerns, emphasizing the need to balance risk and support for infrastructure financing.