Banks have been asked by the union finance ministry to disburse loan to road projects developers who have acquired 80 percent of the required land instead of the existing norm of 100 percent.

Earlier, banks were lending to projects that have 80 percent of land. But later, it shifted to the current norm.

In a notifications to banks, the ministry directed banks to lower the land acquisition requirement for disbursing loans to road projects.

The notification to banks followed letters written by Vijay Chhibber, secretary, ministry of road transport and highways; and RP Singh, Chairman, National Highway Authority of India, requesting the ministry of finance to reverse the move to raise the norm relating to land acquisition for availing of bank loans.

It is learnt that at a meeting of a committee of secretaries, it was decided to ease the loan disbursal process. The committee is headed by the cabinet secretary and includes secretary, department of financial services, ministry of finance; and secretary, road transport and highways.

Banks can sanction the loan when 80 percent land has been acquired. With this, the developers will get some cushion as the uncertainty around the funding will come down, reports suggest.