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RBI allows Banks and NBFCs to float infrastructure fund
Many analysts believe that the central banker has made the changes in order to address the asset-liability mismatch. The practice under which the short-term liabilities are used to support long-term lending is a systematic risk.
In its 12th plan, the planning commission has projected an investment requirement to the tune of Rs 49 lakh crore for infrastructure projects.
The planning commission in its purview considers building of electricity, roads and bridges, ports, airports, telecommunications, railways, irrigation, water supply and sanitation, storage, and oil and gas pipelines.
The banks that will sponsor the IDF-MFs will function under the same limits, checks and balances on investments in financial services companies and limits on capital markets exposure.
If an NBFC is sponsoring the IDF-MF, they the same should have minimum net owned funds of Rs 300 crore. The capital to risk weighted assets ratio (CRAR) of 15%; and net non-performing assets should be maintained at less than 3% of net advances.
Additional criteria required that the NBFC should have existence of more than five years. It should also be earning profit for the last three years. And the performance of the NBFC should satisfactory.
Post-investment, for the IDF-MF the CRAR of NBFC should continue to be maintained at the required level of NOF.
Sponsors, be it the banks or NBFC, must contribute a minimum of 30% equity and a maximum of 49% equity.
Like in the case of IDF-MF, banks acting as sponsor to IDF-NBFCs would also be have limits on exposure to financial markets and capital markets.
A NBFC sponsoring IDF-Mutual Fund should have a minimum NOF of Rs 300 crore. Also it must have a credit rating of ‘A' or equivalent given by an accredited rating agency. The CRAR has been changed to 15%.
The same should also be a party to a tripartite agreement with the concessionaire and the project authority for ensuring compulsory buyout with termination payment.
Post-investment in the IDF-MF, the CRAR of the NBFC should be maintained at the prescribed level and it should continue to maintain the required level of NOF.
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