Jammu, May 7 -- Bankers hold their breath as RBI mulls tightened lending norms for infrastructure projects

The Reserve Bank of India (RBI) has proposed stringent guidelines for how banks fund large infrastructure developments like power plants, mines and transport systems. As per a draft framework released by the central bank, lenders may have to set aside more cash reserves to offset potential loan defaults from these complex projects.

Dubbed 'project financing', this method allows banks to primarily consider revenue generated by the infrastructure work to decide repayment schedule and security. However, rising risks in this space has pushed RBI to strengthen monitoring and restructuring rules.

As per financial analysts, raising stand...