Infrastructure Debt Funds

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Infrastructure Debt Funds

  • In Sept 2011, RBI issued guidelines for permitting banks and NBFCs to set up IDFs to help meet long term financing for the sector
  • IDFs would be set up either as MFs or NBFCs
  • NBFC sponsoring IDF-MF should have a minimum net owned funds of Rs 300 crore and CAR of 15 percent
  • Besides, its NPAs should be less than 3% of net advances and the NBFCs should have been in existence for at least five years and earning profits for the last three years
  • Banks and NBFCs would be eligible to sponsor IDFs as mutual funds with prior approval of the RBI
  • SEBI has amended the Mutual Funds Regulations to provide regulatory framework for IDF-MFs
  • Banks acting as sponsors to IDF-MFs would be subject to existing prudential limits including limits on investments in financial services companies and limits on capital market exposure
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