IDFC seeks infrastructure NBFC status from RBI

Non-banking finance company IDFC has approached RBI to seek a status of infrastructure non- banking finance company, the category which has more flexibility in terms of accessing debt and providing loans.

According to sources, IDFC has recently approached the RBI to seek the infrastructure NBFC status, which would allow the company to improve fund mobilisation and ease overall funding pressure on the firm.

The central bank is likely to take a decision next week whether to grant this status to IDFC.

In February, the Reserve Bank had created a separate entity for NBFC -- Infrastructure Finance Companies (IFCs) -- as infrastructure plays a critical role in the growth of economy.

IFCs are not subject to the borrower limits, which restrict NBFCs from lending to any single borrower by 10 per cent of its owned fund, and any single group of borrowers by 15 per cent of its owned fund.

Recently, the RBI allowed these companies to raise money from overseas markets through the automatic route.

As such, IFCs can now raise external commercial borrowings (ECBs) up to 50 per cent of their owned funds automatically. So far, they could do so only under the approval route.