New RBI guidelines 'fail to mandate' environmental, socially equitable safeguards

By Amitanshu Verma, Kavita Kabeer*
In a comprehensive and detailed response to the Reserve Bank of India's recently released Draft Prudential Framework for Income Recognition, Asset Classification, and Provisioning (IRACP-PUIMP) pertaining to Advances - Projects Under Implementation Directions 2024, civil society and community organisations, academics and social workers have highlighted several critical areas of concern and proposed significant enhancements to the framework. The draft prudential framework released by the central regulator had invited public comments till June 15, 2024.
The response emphasises the framework's inadequate examination of cost overruns and project non-performance. By not sufficiently analysing the causes of these issues, the framework misses an opportunity to create more effective resolution plans based on past learnings. This gap is particularly evident in major infrastructure and energy projects that have faced significant cost overruns and fallen into non-performing asset (NPA) status.
Another key aspect of the response is the role of commercial banks in project finance. The response recommends revisiting this involvement, emphasising that Development Finance Institutions (DFIs) are better suited to handle large-scale infrastructure projects. DFIs possess the necessary expertise and risk mitigation tools to manage the substantial risks associated with these projects, which include construction, operational, market, and political risks.

Furthermore, the current guidelines fall short in mandating robust environmental, social, and climate safeguards at the level of financial institutions. Civil society organisations (CSOs) advocate for mandatory climate risk assessments and sustainable practices to be integrated into the project finance framework. This integration is crucial for mitigating long-term environmental impacts and ensuring that financed projects do not adversely affect vulnerable communities.
The response also underscores the need for mandatory public consultations and periodic social audits to ensure transparency and community involvement in projects. These measures are essential for safeguarding the interests of local populations and ensuring equitable development.
Additionally, the CSOs propose the establishment of comprehensive oversight and redressal mechanisms within financial institutions to achieve full accountability regarding environmental, social, and climate issues.

The response underscores the need for mandatory public consultations and periodic social audits to ensure transparency in projects

A permanent body within each institution should ensure compliance with these standards throughout all project stages, from pre-approval to loan closure.

The collective submission states:

“The new prudential framework is a pivotal step towards financial stability in project finance. However, it must evolve to address the environmental, social, and governance aspects critical to sustainable development. Our recommendations aim to ensure that the framework not only safeguards financial interests but also upholds the broader public good.”
The response believes that these enhancements will significantly strengthen the framework, ensuring that project finance in India is not only economically viable but also socially equitable and environmentally sustainable.

The submission has been signed by the
Centre for Financial Accountability, New Delhi; Bharat Patel, Machimar Adhikar Sangharsh Samiti; Krishnakant, Paryavaran Suraksha Samiti; Dinesh Abrol, Professor, Institute for Studies in Industrial Development, New Delhi; Roma Malik, All India Union of Forest Working People; Dr Himanshu Upadhyaya, Assistant Professor, Azim Premji University, Bengaluru; Monica Harpalani, Independent Researcher; Raj Kumar Sinha, Bargi Bandh Visthapit Evam Parbhavit Sangh, Madhya Pradesh; Ravi Rebapraggada, Samata; Ashok Shrimali, Secretary General of Mines, minerals and People (mm&P) Alliance; Himanshu Thakkar, South Asia Network on Dams, Rivers, among others.
---
*With Centre for Financial Accountability

Comments

The soundtrack of resistance: How 'Sada Sada Ya Nabi' is fueling the Iran war

By Syed Ali Mujtaba* The Persian track “ Sada Sada Ya Nabi ye ” by Hossein Sotoodeh has taken the world by storm. This viral media has cut across linguistic barriers to achieve cult status, reaching over 10 million views. The electrifying music and passionate rendition by the Iranian singer have resonated across the globe, particularly as the high-intensity military conflict involving Iran entered its second month in March 2026.

Kolkata dialogue flags policy and finance deficit in wetland sustainability

By A Representative Wetlands were the focus of India–Germany climate talks in Kolkata, where experts from government, business, and civil society stressed both their ecological importance and the urgent need for stronger conservation frameworks.

Beyond Lata: How Asha Bhosle redefined the female voice with her underrated versatility

By Vidya Bhushan Rawat* The news of iconic Asha Bhosle’s ‘untimely’ demise has shocked music lovers across the country. Asha Tai was 92 years young. Normally, people celebrate a passing at this age, but Asha Bhosle—much like another legend, Dev Anand—never made us feel she was growing old. She was perhaps the most versatile artist in Bombay cinema. Hailing from a family devoted to music, Asha’s journey to success and fame was not easy. Her elder sister, Lata Mangeshkar, had already become the voice of women in cinema, and most contemporaries like Shamshad Begum, Suraiya, and Noor Jehan had slowly faded into oblivion. Frankly, there was no second or third to Lata Mangeshkar; she became the first—and perhaps the only—choice for music directors and all those who mattered in filmmaking. Asha started her musical journey at age 10 with a Marathi film, but her first break in Hindustani cinema came with the film "Chunariya" (1948). Though she was not the first choice of ...

Maoist activity in India: Weakening structures, 'shifts' in leadership, strategy and ideology

By Harsh Thakor* Recent statements by government representatives have suggested that Maoism in India has been effectively eliminated, citing the weakening of central leadership and intensified security operations. These claims follow sustained counterinsurgency efforts across key regions, including central and eastern India. However, available information from security agencies and independent observers indicates that while the organizational structure of the CPI (Maoist) has been significantly disrupted, elements of the movement remain active. Reports acknowledge the continued presence of cadres in certain forested regions such as Bastar and parts of Dandakaranya, alongside smaller, decentralized units adapting their operational strategies.

'Fraudulent': Ex-civil servants urge President to halt Odisha tribal land dispossession

By A Representative A collective of 81 retired civil servants from the Constitutional Conduct Group has written to the President of India expressing alarm over what they describe as the wrongful dispossession of tribal lands in Odisha’s Rayagada district. The letter, dated April 19, 2026, highlights violent clashes in Kantamal village where police personnel reportedly injured over 70 tribal residents attempting to protect their community rights.

From Manesar to Noida: Workers take to streets for bread, media looks away

By Sunil Kumar* Across several states in India, a workers’ movement is gathering momentum. This is not a movement born of luxury or ambition, nor a demand for power-sharing within the state. At its core lies a stark and basic plea: the right to survive with dignity—adequate food, and wages sufficient to afford it.

Dhandhuka violence: Gujarat minority group seeks judicial action, cites targeted arson

By A Representative The Minority Coordination Committee (MCC) Gujarat has written to the Director General of Police seeking judicial action in connection with recent violence in Dhandhuka town of Ahmedabad district, alleging targeted attacks on properties belonging to members of the Muslim community following a fatal altercation between two bike riders on April 18.

Midnight weeping: The sociology of tragic vision in Badri Narayan’s poetry

By Ravi Ranjan* Badri Narayan, a distinguished Hindi poet and social scientist, occupies a unique position in contemporary Indian intellectual life by bridging the worlds of creative literature and critical social inquiry. His poetic journey began significantly with the 1993 collection 'Saca Sune Hue Kaï Dina Hue' (Truth Heard Many Days Ago). As a social historian and cultural anthropologist, Narayan pioneered a methodological shift away from elite archives toward the oral traditions and folk myths of marginalized communities. He eventually legitimized "folk-ethnography" as a rigorous academic discipline during his tenure as Director of the G.B. Pant Social Science Institute.

Why link women’s reservation to delimitation? The unspoken political calculus

By Vikas Meshram* April 16, 2026, is likely to be recorded as a special day in the history of Indian democracy. In a three-day special session of Parliament, the central government is set to introduce a comprehensive package of three historic bills: the Constitution (131st Amendment) Bill, 2026; the Delimitation Bill, 2026; and the Union Territories Laws (Amendment) Bill, 2026. The stated purpose of all three is the same: to implement the Nari Shakti Vandan Adhiniyam (106th Constitutional Amendment) passed in 2023. However, the political intent concealed behind these measures — and their impact on the federal balance — is far more profound. It is absolutely essential to understand this.

Counterview

Search This Blog