RBI to Relax Norms on SEZ Loans

April 17, 2007	(1 votes, average: 4 out of 5)  Loading ...
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With the empowered group of ministers (EGoM) releasing stringent rules for the development of SEZs in India, Reserve bank of India (RBI) finds it a little difficult to revise its guidelines on bank lending to SEZs.

Earlier, the commerce ministry was asking the RBI to treat all loans for the SEZ development in the same manner as exposure to commercial real estate. Now, it has become an ironic situation with the EGoM prescribing a cap of 5,000 hectares on the size of multi-product SEZs and constant standard on the utilization of a minimum 50% of the area for core industrial activities.

SEZs envisage attracting large investments and giving a push to other economic activities. However, SEZs developers should not be put at a disadvantage in availing bank loans. Despite all, the commerce ministry officials expect the RBI to take amended SEZ rules into high consideration.

RBI alone has the power to bring any changes in the prevailing norms applicable on bank loans to different sectors. The EGoM cannot interfere in the decisions, says an official. But, the change of rules for SEZs development has limited the real estate activities to be undertaken within each zone. This renders strong possibilities regarding RBI easing the bank loans for setting up SEZs.

News Published Under:   Special Economic Zones |

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