The Reserve Bank of India has defined
financial closure for greenfield projects to mean that it should not be less
than 90 per cent of the total project cost. This would thus be a legal binding commitment
of equity shareholders and debt financiers to mobilise and provide funding for
the project.
Further, the definition would also ensure uniform
interpretation of the term ‘financial closure’ for the purpose of asset
classification under the guidelines issued on 1 February 2002 vide a
notification.