Infrastructure Debt Funds

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