FIDC Seeks Review Of DCCO From RBI On Many Points

FIDC has requested that no limit be placed on maximum cost overrun which can be funded and it should be left on commercial decision-making.

FinTech BizNews Service 

Mumbai, June 11, 2024: RBI has recently issued consolidated guidelines for restructuring of exposures relating to projects under Implementation on account of change in Date of commencement of commercial operations (DCCO). 

Finance Industry Development Council has placed following comments on the Draft Guidelines for consideration of RBI, says Mahesh Thakkar, Director General, FIDC:

Draft Guidelines Submission

The dispensations available under

this framework shall be available only

to those lenders who have extended

finance to such project loans based on

a common agreement between the

debtor and the lender(s).


Clarification Sought

We request RBI to clarify whether this

framework will be applicable to loans 

which were extended prior to such

guidelines where there is no common 

agreement between debtor and the Lender.

Draft Guidelines

In projects financed under consortium arrangements, where the aggregate exposure of the participant lenders to the project is up to Rs1,500 crores, no individual lender shall have an exposure which is less than 10% of the aggregate exposure. For projects where aggregate exposure of lenders is more than Rs. 1,500 crores, this individual exposure floor shall be 5% or Rs150 crores, whichever is higher.


We request RBI to not to prescribe minimum limits for financing and let it be decided by commercial agreement between the Parties. The Lenders will be required to be part of an agreement jointly with Debtors. This will ensure that rights and duties of parties will be clear, un-ambiguous and protected.

Draft Guidelines

Any such Credit Event shall be reported to the Central Repository of Information on Large Credit (CRILC) by the lenders in the prescribed weekly as well as the CRILC-Main report in compliance with the extant instructions, as applicable. Lender(s) in a consortium/MBA shall also report occurrence of such credit event to all other members of the consortium/MBA.


We submit that the NBFCs do not have access to CRILC. This will mean that there will be lag for such information to come to notice of NBFCs, through other lenders. We request if longstanding industry request of providing access to NBFCs to CRILC to be considered favorably.

Draft Guidelines

Extension of DCCO


We request timeline for extension for exogenous and legal reasons be also the same that for endogenous i.e. 2 years.

Draft Guidelines

In cases where lenders have specifically sanctioned a ‘Standby Credit Facility (SBCF) at the time of initial financial closure to fund cost overruns arising on account of extension in DCCO, they may fund cost overruns as per the agreed terms and conditions up to a maximum of 10% of the original project cost.


We are of the view that cost over-runs may happen for various reasons including those which are beyond the control of borrowers/lenders. Any cap has the potential of inhibiting the project continuation even after considering extension of DCCO. We, therefore, request that no limit be placed on maximum cost overrun which can be funded and it should be left on commercial decision-making. The suggestion of enhanced provisioning as provided for in paragraph 33 hereinbelow will ensure prudence of the lenders in considering the quantum of additional funding for the project after extension of DCCO.

Draft Guidelines

Construction Phase: A general provision of 5% of the funded outstanding shall be maintained on all existing as well as fresh exposures on a portfolio basis


We request that instead of flat provision of 5% for all projects in construction phase, it should continue to be standard provision rate of 0.4%. The enhanced provisioning may be stipulated only for projects where there is a DCCO extension. Such a measure will ensure better project selection by the lenders.


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