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5/25 Scheme: A Ray of Hope for Distressed Infrastructural Projects

News
Torrent Power is seeking relief via the 5/25 scheme for one of its power projects for which banks have lent it approximately Rs 1,300 crore, according to three senior bankers familiar with the development.
Source: Financial Express

SNP Insights
5/25 Scheme is one of the good move by the RBI for infrastructure projects as it not only give flexibility to the banks to determine pricing of the loan at each stage of refinancing of the debt but  also likely to improve the viability of the project by extending the repayment schedule for 20 to 25 years. Also, it may help bank in improving the asset quality as under this scheme any restructured loan will not be considered as bad debt and thus protect bank from 15% provision against such loan. 
Source: SNP Infra Research