MUMBAI: The Reserve Bank of India’s proposal to reduce risk weights for NBFCs lending to high-quality operational infrastructure projects will enhance future competitiveness, lower financing costs, and increase the lending capacity of NBFCs, a report said on Tuesday.
The move would align NBFC regulations with those of banks, which enjoy lower capital requirements for highly rated assets, according to the report from ratings agency CareEdge Ratings.
"By differentiating between operational and under-construction projects, NBFCs can allocate capital more efficiently to de-risked assets, thereby lowering financing costs and enhancing lending capacity, " the firm welcomed the RBI move.
Although NBFCs currently maintain strong capital buffers, the change is expected to enhance future competitiveness and capital efficiency, it added.
The report said that as NBFCs show growth in infrastructure lending, especially in the power sector, the measure supports long-term funding from institutional investors and strengthens the overall infrastructure financing ecosystem.