New Delhi: IIFCL entrusted with task of setting up of credit enhancement agency is waiting for regulation from the RBI, a senior official said.
The proposal for setting up of a dedicated fund to provide credit enhancement to infrastructure projects was announced by Finance Minister Arun Jaitley in the last Budget.
"We are awaiting RBI guidelines for regulation of Credit Enhancement Enhancement Fund," India Infrastructure Finance Company Ltd (IIFCL) Deputy Managing Director Sanjeev Kaushik told PTI.
IIFCL is already in process of setting up the company and applying for permission, he said. The Rs 500 crore IIFCL-anchored fund will help in raising the credit rating of bonds floated by infrastructure companies and facilitate investment from long term investors.
Kaushik said, capital commitment from other investors are also being tied up and the process is at the final stage. Some public sector banks including SBI and Bank of Baroda have evinced interest in picking up stake in the fund.
Public sector General Insurance Corporation of India (GIC Re) plans to hold 15 per cent in the credit enhancement fund. Besides, Indian Renewable Energy Development Agency (IREDA), another PSU, is likely to hold 5 per cent stake in the fund.
The proposed venture is expected to be registered as the Alternate Investment Fund (AIF) under Sebi. Companies issued Rs 4.13 lakh crore of bonds in 2014-15, according to a report by the Reserve Bank.
The central bank is in favour of a separate regulatory framework for providing credit enhancement by non-banking finance companies to bolster bond ratings.
