For interest capitalization, the banks and financial institutions will have to make the basis of the area of interest capitalization, realistic analysis of the cash flow of the project, the terms of payment of the capitalized interest, the proposed capital plan and its basis, and the proposed loan-self-capital ratio.

Similarly, even if it takes at least two years to resume the project due to circumstances beyond the control of the borrower, the maturity of interest can be capitalized during the grace period by fulfilling certain conditions.

In such a situation, all the principal and interest exceeded the loan should be recovered and the grace period should be provided.

The interest amount so capitalized will have to be separately accounted for under the heading of Interest Capitalized Term Loan (ICTCL). The Rastra Bank has stated that the payment period of the amount can be determined by the concerned banks and financial institutions themselves.