Other relaxations Banks are permitted to treat annuities under build-operate-transfer (BOT) model in respect of road/highway projects and toll collection rights, where there are provisions to compensate the project sponsor if a certain level of traffic is not achieved, as tangible securities subject to the condition that banks’ right to receive annuities and toll collection rights is legally enforceable and irrevocable.
In view of certain safeguards, such as, escrow accounts available in respect of infrastructure lending, unsecured sub standard infrastructure loan accounts which are classified as substandard will attract a lower provisioning of 15 per cent (20 per cent with effect from May 18, 2011).