In view of certain safeguards such as escrow accounts available in respect of infrastructure lending, unsecured infrastructure loan accounts which are classified as sub-standard attract a provisioning of 20 per cent instead of the prescription of 25 per cent for other unsecured sub-standard accounts.
To avail of this benefit of lower provisioning, the banks should have in place an appropriate mechanism to escrow the cash flows and also have a clear and legal first claim on those cash flows. The Reserve bank has provided additional toolkits to banks to deal with stressed assets.