RBI classifies PTC India Financial as infra finance company

PTC India Financial Services (PFS) today said the Reserve Bank has classified it as an infrastructure finance company, which will help the term lender access cheaper resources.

PFS has been classified by the Reserve Bank of India as infrastructure finance company within overall classification of Non Banking Finance Company (NBFC), the company said in a statement.

The status given to the company would allow it to mobilise funds at lower cost and get flexibility in the infrastructure lending.

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

IFCs can raise fund through external commercial borrowings (ECB) up to 50 per cent of their net worth and also issue tax free infrastructure bonds. So far, the company could raise ECBs only under the approval route.

"Grant of IFS status would reduce cost of borrowings for PFC to a considerable extent," the statement added.

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

The other NBFCs which have received IFC status so far include IDFC and PFC.