RBI to come out with guidelines on refinance

The Reserve Bank of India (RBI) would shortly come out with guidelines on refinance of existing projects as demanded by the industry, its deputy governor S S Mundra said on Wednesday.

"There is a demand from the industry for refinance of existing projects. RBI will come out with the guidelines soon," Mundra said at a CII interaction here.

He said new projects would get the scope for refinance every five years till the economic life of the projects as already declared. "But for existing projects, the guidelines will be out soon," he said.

Sounding a word of caution on big projects having thin equity, Mundra said, "There are many projects based on thin equity. This is like skating on thin ice." He said that when economic growth is robust, such projects carry on as many of the ills are taken on stride. "But when growth falters, signs of early distress crop in ... RBI is keeping a vigil on projects which are having thin equity to see whether there are signs of early distress," Mundra said.

Ahead of the RBI central board meeting here tomorrow, Mundra said the regulator was keeping its ears close to the ground.