Whether you are setting up a new plant, expanding a factory, building a hospital or adding a school block, the term-loan conversation starts with one document: the project report, often called a DPR (detailed project report). Lenders use it to understand the project and test whether it can repay. A weak report slows the file down or gets it declined. A clear one lets the credit team spend its time on the real questions.
Here is what a bankable DPR contains, how lenders read it, and the RBI rules that now shape project lending.
What is a project report, and when do lenders ask for one?
A project report is a structured business case for a specific capital investment. Lenders ask for one for term loans and project funding: new (greenfield) units, expansions and modernisation of existing (brownfield) units, and large equipment purchases. For working capital limits, banks usually want projections in the CMA data format instead, or as well (see below).
The structure of a bankable DPR
Most lenders expect these sections, in roughly this order.
- Executive summary. The project, its cost, the loan sought, the promoters' contribution, and the headline ratios (DSCR, debt-equity, break-even, IRR).
- Promoter and company profile. Constitution, ownership, management experience, group concerns, existing banking, and the credit history of the company and its promoters.
- Project description. What is being built or bought, where, capacity, and an implementation schedule with key milestones.
- Market analysis. Demand, customers, competitors, pricing, and the basis for your sales assumptions: orders in hand, letters of intent, past sales.
- Technical feasibility. Process or technology, machinery and suppliers, utilities (power, water), raw materials, manpower, and statutory clearances such as pollution consent, building permissions and factory licence.
- Cost of project. Land, site development, buildings, plant and machinery, installation, preliminary and pre-operative expenses, contingencies, interest during construction and margin money for working capital.
- Means of finance. Term loan, promoter equity, unsecured loans from promoters, subsidies and internal accruals, adding up exactly to the cost of project.
- Projected financials. Profit and loss, balance sheet and cash flow for the whole loan tenure, with clearly stated assumptions.
- Repayment and ratio analysis. Repayment schedule with moratorium, year-wise DSCR, interest coverage, debt-equity, current ratio and break-even.
- Sensitivity analysis. What happens to DSCR if prices fall, costs rise, capacity use is lower or the project is delayed.
- Risks and mitigants, plus the security offered.
Cost of project and means of finance
This is where lenders start probing. Every cost line should be backed by quotations, estimates from an architect or engineer, or agreements. Contingency and pre-operative costs should be realistic, not padded. Lenders also check that promoter contribution, the part of the cost funded by you, comes from identifiable sources and is brought in before or alongside the loan.
How much you must contribute varies by lender, scheme and sector. As one example, SBI's Surya Shakti solar scheme asks for at least 20% of project cost from the promoter for captive projects and 25% for others, with debt-equity of no more than 4:1. Many projects also need margin money for working capital built into the cost, so the plant isn't starved of cash on day one.
Projected financials and DSCR
The debt service coverage ratio (DSCR) compares the cash a project generates with what it owes lenders each year. A common bank formulation is:
DSCR = (Net profit after tax + depreciation + interest on term loan) ÷ (principal repayment + interest on term loan)
Lenders look at both the average DSCR over the loan and the minimum in any single year. There is no single RBI-mandated minimum for ordinary term loans: each lender sets its own threshold in its credit policy, and the threshold differs by scheme and sector. Two official examples:
| Scheme | DSCR requirement |
|---|---|
| SBI Surya Shakti solar finance | Average gross DSCR of at least 1.20, counting all term loans |
| Bank of Baroda Arogyadham (healthcare) | Average 1.75, and not below 1.25 in any year |
Treat these as illustrations of how lenders set the bar, not as the number your project needs to hit.
Break-even, sensitivity and IRR
- Break-even shows the capacity use or sales level at which the project covers its costs. A low break-even gives comfort.
- Sensitivity analysis stress-tests the projections. Lenders usually want to see DSCR stay acceptable when revenue falls or costs rise by a modest margin.
- IRR (internal rate of return) shows the project's overall return. Lenders treat it as secondary to cash-flow coverage, but a project whose IRR is below its cost of funds raises questions.
What is CMA data, and how is it different from a DPR?
CMA (Credit Monitoring Arrangement) data is the standard set of forms banks use to assess working capital. It traces back to the Tandon Committee (1974) and Chore Committee (1979) era of "maximum permissible bank finance" (MPBF) and was brought in to replace the older system under which large credit proposals needed RBI's prior approval. A typical CMA set includes:
- Existing and proposed limits
- Operating statement
- Analysis of the balance sheet
- Comparison of current assets and current liabilities
- Calculation of the eligible bank finance
- Funds flow
- Key ratios
RBI later stopped prescribing MPBF. Banks may now assess working capital using MPBF or any other method approved by their Board. For micro and small enterprises, RBI's MSME FAQs note that working capital up to ₹5 crore is computed at a minimum of 20% of projected turnover. Many banks still ask for projections in CMA format because it gives them a consistent way to compare borrowers.
In short, a DPR justifies a capital investment and a term loan, while CMA data sizes and monitors a working capital limit. A new project often needs both. For how the facilities differ, see our guide on term loans, cash credit and overdrafts.
When do lenders insist on a TEV study?
A techno-economic viability (TEV) study is an independent check of your project by a consultant on the lender's panel, covering both the technology and the numbers. Banks keep panels of approved TEV consultants. SBI's empanelment guidelines, for instance, require qualified technical (engineering) and financial (CA/ICWA) professionals and set an indicative fee of 0.10% of the project loan, capped at ₹0.50 crore plus GST.
Each bank's credit policy decides when a TEV study is required, typically by loan size, sector or complexity. Expect one for large, new or technically complex projects, for consortium loans, and when a project's terms are revisited. RBI's project finance rules themselves call for a fresh TEV study in some cases. One example: if the appointed date of a PPP infrastructure project changes before disbursement, the original DCCO can be revised, but projects with aggregate exposure of ₹100 crore or more need a fresh TEV study.
RBI's 2025 project finance rules: what changed
RBI issued the Reserve Bank of India (Project Finance) Directions, 2025 on 19 June 2025, effective 1 October 2025. They apply to banks, NBFCs (including housing finance companies), urban co-operative banks and all-India financial institutions. In RBI's November 2025 consolidation, the provisions were carried into each type of lender's own Directions; for commercial banks, these include the IRACP and Resolution of Stressed Assets Directions. The key points:
- Applies to new projects. The rules cover project finance exposures that had not reached financial closure by 1 October 2025. Earlier projects are generally grandfathered unless there is a fresh credit event or material change.
- Before disbursement. Financial closure must be achieved and the original DCCO (date of commencement of commercial operations) written into the loan agreement. Disbursements must follow project progress, and land availability thresholds apply: 50% for PPP infrastructure projects, 75% for other projects, including commercial real estate.
- DCCO deferment caps. The DCCO can be extended by up to 3 years for infrastructure and 2 years for non-infrastructure projects (including commercial real estate) while the account stays standard, subject to conditions. Cost overruns linked to the delay can be funded up to 10% of the original project cost, in addition to interest during construction.
- Higher provisioning during construction. Banks hold standard-asset provisions of 1% during construction (1.25% for commercial real estate, 1% for CRE-residential housing). These fall to 0.4% for most projects once interest and principal repayments begin (1% for CRE and 0.75% for CRE-RH). On top of that, DCCO deferment attracts additional provisions of 0.375% per quarter for infrastructure and 0.5625% per quarter for other projects.
What this means for borrowers: a realistic implementation schedule matters more than ever. Delays now cost lenders more in provisions, which can feed into pricing and appetite. Build credible timelines and contingency into the DPR from the start. Our guide on how lenders assess construction finance covers how the same rules apply to real estate.
Common DPR mistakes that slow approvals
- Hockey-stick projections. Capacity use jumping to near-full in year one, or margins well above what peers or your own history achieve.
- Cost of project that doesn't add up. Missing interest during construction, working capital margin or contingency, or costs without quotations behind them.
- Means of finance with gaps. Promoter contribution with no clear source, or reliance on a subsidy that isn't yet sanctioned.
- Cash flow that doesn't tie to the P&L and balance sheet. Lenders check that the three statements reconcile.
- No sensitivity analysis, or one that only tests trivial changes.
- Ignoring approvals. Missing environmental, building or factory clearances, which can block disbursement under RBI's rules.
- Generic templates. Boilerplate market sections that say nothing about your customers or location.
For other common red flags, see why loan applications get rejected. If you are weighing which kind of lender to approach, our comparison of banks, NBFCs and financial institutions may help.
How Biz Corp Solutions helps
We help businesses, institutions and developers shape their project funding requirement and organise a lender-ready file, covering cost of project, means of finance, projections and supporting documents. We then approach suitable banks, NBFCs and financial institutions, keeping you updated at every stage. Lenders make their own appraisal and credit decision, including whether a TEV study is needed. Explore our project funding and construction finance services.