Public sector firms join hands for infrastructure financingSeptember 17th, 2011 - 11:05 pm ICT by IANS
Mumbai, Sep 17 (IANS) Government-run financial institutions — Life Insurance Corporation, India Infrastructure Finance Company Ltd and Infrastructure Development Finance Company — Saturday signed an agreement aimed at removing bottlenecks in infrastructure financing.
The three financial institutions will provide take-out financing for infrastructure projects in the country. These institutions signed a memorandum of understanding (MoU) in the presence of Finance Minister Pranab Mukherjee here.
Mukherjee said this mechanism will help financing infrastructure projects to the tune of Rs.30,000 crore.
“This will facilitate banks to take more exposure in new projects, which in turn will help in bridging the gap in infrastructure financing to a great extent,” he said.
Take-out finance is essentially a mechanism designed to enable banks/lenders to avoid asset liability mismatch that may arise out of extending long tenure loans to infrastructure projects.
Under this arrangement, banks that extend credit facility to infrastructure projects enter into an arrangement with a financial institution for transferring the loan outstanding in the bank’s books to the books of the financial institution who take out the loan.
- IIFCL, Union Bank ink deal for Rs.1,500 crore takeout finance - Oct 12, 2010
- India launches $2 billion infrastructure debt fund - Mar 05, 2012
- IIFCL's role to be expanded - Sep 13, 2011
- Takeout financing scheme to be evolved by IIFCL - Jul 06, 2009
- Government eyes long-term debt to fund infra projects - Oct 12, 2010
- Don't delay infrastructure, Pranab tells western states - Sep 17, 2011
- SBI sets infrastructure credit limit at Rs.1 tn - Feb 11, 2011
- India to set up debt fund to finance infrastructure - Jun 24, 2011
- Overcome hurdles to up investment in infrastructure: FICCI - Sep 11, 2011
- India gets $250 mn infrastructure loan from ADB - Mar 21, 2011
- Reliance Commercial Finance to move out of unsecured loans - Dec 06, 2011
- Govt. aiming at double digit GDP growth in medium term: Pranab Mukherjee - Nov 19, 2010
- Reliance Industries raises $2 billion loan - May 09, 2012
- Inflation forces India's central bank to hike rates again (Roundup) - May 03, 2011
- S&P; lowers outlook on SBI, ICICI and HDFC Bank - Apr 25, 2012
Tags: asset liability, bottlenecks, bridging the gap, development finance, finance company ltd, finance minister, financial institution, financial institutions, india infrastructure, infrastructure development, infrastructure finance, infrastructure projects, life insurance corporation, memorandum of understanding, mismatch, mou, new projects, pranab mukherjee, s books, sector firms