The takeover of NBFC (Non-Banking Financial Company) means the purchase of NBFC by another comp...
The reserve bank of India, having considered it necessary in public interest and being satisfied that, to enable the bank to regulate the credit system to the advantage of the country, it is necessary to have a separate category of Infrastructure Finance NBFC’s category. Infrastructure companies are one the NBFC institution, engaged in the business of providing loans to infrastructure companies. Infrastructure Finance Companies are predominantly engaged in providing loan to the infrastructure sector. The creation of a separate category of NBFC’S (NBFC-IFC), expected to play an important role in banks as a provider of infrastructure finance.
Infrastructure Finance Company is another category of NBFC, or we can say it’s a financial institution engaged in the business of providing loans to infrastructure companies.
According to RBI, “an IFC is defined as a Non-Banking Financial Company if;
It means the credit facility extended by NBFCs to a borrower for exposure in the following categories of infrastructure sectors and sub-sectors.
According to RBI,
Read our article:Loan Exposure of NBFC Increased: A Complete Analysis
IFC grants credit as per the following basis –
In the year 2005-2006, hon’ble finance minister, while presenting the union budget for 2005-2006 accepted the need and significance of having a suitable infrastructure in India and made the following announcement –
According to Mr.P. Chidambaram (Ex-Finance Minister) “The importance of infrastructure for rapid development cannot be overstated. The most glaring deficit in India is the infrastructure deficit. Investment in infrastructure will continue to be funded through the Budget. However, there are many infrastructure projects that are financially viable but, in the current situation, face difficulties in raising resources. I propose that such projects may be funded through a financial Special Purpose Vehicle ….. The SPV will lend funds, especially debt of longer-term maturity, directly to the eligible projects to supplement other loans from banks and financial institutions. The government will communicate the borrowing limit to the SPV at the beginning of each fiscal year”
Subsequently, RBI has registered IIFCL, a wholly govt. Owned company in January 2006, and commenced its operation wholly from April 2006. The main Aim of IIFCL is to provide long term finance to the workable infrastructure projects. IIFCL has been registered as NBFC-ND-IFC since September 2013. Till 30th September 2015, the paid-up capital of IIFCL has noted 5,000 crore and Rs. 3,900 crore. Total cumulative gross sanctions made by IIFCL till 30th September 2015, was over 63,800 crore under direct lending to more than 360 projects and if we talk about cumulative disbursements, over 45,00 crore has been disbursed by IIFCL.201812141136106671608BALANCE_SHEET_AS_AT_30T_SEPTEMBER_2018-1
An NBFC is authorized as Infrastructure Finance Company when a minimum of 75% of assets are deployed for the infrastructure sector. Working over the issue faced by infrastructure companies, the government of India, approved a scheme for Financing Viable Infrastructure Projects through a Special Purpose Vehicle called India Infrastructure Finance Company Ltd. The mission of IIFCL is to “adopt the best practice in financing infrastructure and develop core competencies in facilitating infrastructure development.