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Covid-19 impact: New lending formula for road projects on the anvil

The government is looking at an average of the marginal cost of funds-based lending rates, or MCLRs, of several lenders for road construction projects

Topics
Ministry of Road Transport and Highways | Road construction  | MCLR

Megha Manchanda  |  New Delhi 

The Union government is working on new norms on lending for hybrid-annuity projects after operators suffered losses due to pandemic-induced lockdown. In order to reduce risks in road construction projects and also cushion banks, the government is looking at an average of the marginal cost of funds-based lending rates, or MCLRs, of several lenders for such contracts.

This would spread the risks in a project over multiple banks as distinct from one bank, which happens now. The MCLR is an internal reference rate for banks fixed by the Reserve Bank of India. Under the ...

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First Published: Mon, September 14 2020. 06:10 IST
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