Banks, NBFCs can sponsor infra debt funds:RBI

The Reserve Bank of India (RBI) on Friday said banks and non banking financial companies (NBFCs) will be eligible to sponsor Infrastructure Debt Funds (IDFs) which can be set up as mutual funds and NBFCs.

NBFCs should have minimum net-owned funds of Rs 300 crore and a capital adequacy ratio of 15 percent, the Reserve Bank of India said in a statement.

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Banks acting as sponsors would be subject to their prudential limits on investments in financial services companies and limits on capital market exposure, the statement said.

The federal finance minister had in his budget speech for fiscal year 2011-12 announced the setting up of IDFs to source long-term debt from both foreign and domestic investors, and also eased taxation rules to make IDFs more attractive to off-shore funds.

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Reuters