Banks get to show infra loans as 'sub-standard'

MUMBAI: Banks will have a greater flexibility in showing an infrastructure loan as ���sub-standard���. At the point of financial closure, banks have to mention the date when the project will get completed. In case of infrastructure ventures, if the project goes commercial beyond one year after the date of completion as originally envisaged, the account is treated as a ���sub-standard��� loan asset.

Now, the one-year grace period has been extended to two years with effect from March ���08. This will help banks with such accounts show a lower level of bad loans for the financial year 2007-08. Also, they will have to make lower provisioning since some of the loan accounts will not be treated as non-performing assets.