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BoB, ICICI, LIC, Citi To Float $2-Bn Infra Fund

BW Online Bureau Nov 08, 2014

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[Four financial institutions — Bank of Baroda (BoB), ICICI Bank, LIC and Citi Financial — on Monday agreed to form the country's first $2 billion (about Rs 10,000 crore) Infrastructure Development Fund (IDF) to finance infrastructure projects in the country. "This is the first IDF and will have an equity capital of Rs 300 crore. It will start operations in the next fiscal (beginning April 1, 2012) ... Total fund size would be USD 2 billion", Bank of Baroda (BoB) Chairman M D Mallya told reporters here. An MoU to set up the fund was signed by the representatives of the banks and financial institutions including Bank of Baroda (BoB) chief Mallya and ICICI Bank CEO and managing director Chanda Kochhar in presence of Finance Minister Pranab Mukherjee. ICICI Bank, the sponsor of the joint venture, will hold 31 per cent equity in the IDF followed by Bank of Baroda (30 per cent), Citi Financial (29 per cent) and LIC (10 per cent). The ICICI Bank has already received the Reserve Bank's in-principle nod to set up the IDF through the NBFC (non-banking financial company) route last month. According to RBI guidelines, IDFs to be set up as NBFCs should have a minimum net-owned fund of Rs 300 crore and a capital adequacy ratio of 15 per cent. In his last Budget speech, Finance Minister Pranab Mukherjee had mooted the idea of IDFs to accelerate the flow of long term debt in infrastructure projects. Besides, ICICI Bank, many other lenders including IIFCL, IDBI Bank are also planning to set up IDFs. (PTI)