The Reserve Bank of India (RB) on Monday gave legroom to banks by allowing them to extend the date of commencement of commercial operations (DCCO) of a stalled project by up to two years in case its ownership changes hands. The apex bank said it has been receiving representations from banks that new promoters or developers of a stalled project may require time to revive or complete the stalled projects.
"It has been decided that in cases where, in the assessment of the banks, the implementation of the project has been stalled primarily due to inadequacies of the existing promoters and a subsequent change in the ownership of the borrowing entity has been effected, banks may permit extension of DCCO up to a further period of two years," RBI said in a notification.
In February, RBI had proposed for an extension in DCCO without change in asset classification in cases of change in ownership of projects.