IDBI to float arm for core fund
Public lender IDBI Bank Ltd will set up a non-banking subsidiary to float an infrastructure debt fund.
“We are waiting for the Reserve Bank of India to come up with the guidelines for setting up non-banking finance companies (NBFC) that are eligible for floating infrastructure debt funds. The banking regulator is expected to announce its guidelines for setting up such NBFCs within the next six months,” IDBI Bank executive director R.K. Bansal told reporters today.
With Rs 33,000-crore credit outstanding in infrastructure projects, IDBI Bank has been planning to launch an infrastructure debt fund (IDF) to generate more long-term resources for power, port and road projects. Under the current regulations of the RBI, a commercial bank can lend a maximum of 25 per cent of its loan book to the core sector.
The Planning Commission has estimated the funding requirement of the infrastructure sector at $1 trillion with banks being the largest lenders. Insurance companies are not allowed to invest in infrastructure firms having a credit rating below AAA.
In June, the government issued a guideline, based on the recommendations of the Deepak Parekh committee, allowing banks to float infrastructure debt funds either through trust-based asset management companies (basically mutual funds) or through non-banking finance companies.
A trust-based fund will be regulated by the Securities and Exchange Board of India, while a fund set up as an NBFC will be under the Reserve Bank of India. Apply for Best Home Loans in Kolkata
Debit-credit card
IDBI Bank has launched a debit-cum-credit card, Magic Card, for its salary savings account holders.
“The card will work as a debit card till the account holder has balance in it but once exhausted, any further withdrawal or expenditure, the magic card will act similar to a credit card,” IDBI Bank chairman and managing director R.M. Malla said.
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