# Banks unite on project finance lending rules

> Indian banks are creating a common framework for project loans to stop regulatory gaps and conflicting classifications among lenders.
- Title: Banks unite on project finance lending rules | Shortify
- Summary: Indian banks are creating a common framework for project loans to stop regulatory gaps and conflicting classifications among lenders. Banks are aligning…
- Keywords: project finance, banks, lending standards, regulatory arbitrage, consortium lenders, reserve bank of india, rbi guidelines, common framework, capital outlay, gestation period, unite, project
- Source: The Economic Times — https://economictimes.indiatimes.com/industry/banking/finance/banking/banks-unite-to-establish-unified-project-finance-lending-standards-to-minimize-regulatory-gaps/articleshow/134374140.cms
- Author: Dheeraj Tiwari
- Published: 2026-09-20T18:41:00+00:00
- Read time: 1 min
- Topics: project finance, banks, lending standards, regulatory arbitrage, consortium lenders, reserve bank of india, rbi guidelines, common framework, capital outlay, gestation period
## Banks seek unified lending rules
Indian banks are developing a common framework for project finance lending to stop regulatory arbitrage and operational misalignment among consortium lenders.
## Common parameters under discussion
The framework could cover capital outlay, amount funded, and gestation period to ensure consistent loan classifications across all lenders in a consortium.
## RBI leaves decision to banks
The Reserve Bank of India allows individual bank boards to determine whether a loan qualifies as project finance, creating scope for divergent interpretations.
## Risk mitigation and audit alignment
A common framework will reduce divergent audit observations and bring better risk mitigation across consortium lenders working on the same project.

> A common framework will also bring in risk mitigation and avoid issues such as divergent audit observations.
## RBI's October 2025 guidelines
RBI rationalized standard asset provisioning to 1% for under-construction projects and 1.25% for commercial real estate, effective October 2025.
## Common agreement, flexible terms
RBI mandates all lenders share a common agreement with the debtor, but allows different loan terms for each lender if agreed by all parties.
## Key takeaway

Banks are aligning project finance standards to prevent regulatory arbitrage and ensure consistent loan classifications across consortium lenders.