Public sector lender IDBI Bank is in talks with various financial institutions, including other state-owned banks, to float an infrastructure debt fund, a top official has said.
“We are in talks with various financial institutions to float an infrastructure debt fund after the recent approval of the Reserve Bank allowing banks to launch such funds,” Executive Director, Mr Melwyn Rego, told PTI here.
He, however, declined to name the institutions, or give information about the corpus of the proposed fund.
However, sources said the bank is in talks with its public sector peers, including Corporation Bank, and pure-play infra finance company, India Infrastructure Finance Company.
On September 24, the RBI allowed banks and non-banking finance companies (NBFCs) to sponsor the IDF, which can be set up as mutual funds and NBFCs.
As per the central bank guidelines, IDFs that can be set up as NBFCs should have a minimum net-owned fund of Rs 300 crore and a capital adequacy ratio of 15 per cent.
During the Twelfth Plan (2012-17), the Government plans to spend around $1 trillion (Rs 50 lakh crore) to fund infrastructure, which is almost double that of the Eleventh Plan infra expenditure.
Banks' total infrastructure lending aggregated Rs 5,52,682 crore by the end of June quarter this fiscal.
IDBI Bank, which draws its lineage from infra funding as a development finance bank, has earlier evinced interest to set up such debt funds and is expected to ramp up its lending to this segment through the specialised fund.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.